Q's about secured credit cards

[MrOwlEye]

vb1962: Yes, my bank (HSBC) recently denied my secured card application. I came to them with $2,000 and they said "no." The risk to them was nil, but they still said no.

On the bright side, I've found lately that most car rentals and hotels will take a debit card. Yes, they still freeze $300 - $500 in your account on top of the bill, but at least they take the card.

[vb1962]

I have called several secured card issuers including Citi, US Bank, Wells Fargo and Capital One and have been told I have to have 2 years POST bankruptcy to even get a secured card. Anyone get this response? Bank of america is next on my list.

[MrOwlEye]

Thanks, viking64. Do you have to a member of some other organization to join DCU? What does it take to join?

[viking64]

viking64 -- Thanks for the reply.

I agree, it does appear the debit cards can cover most things -- but it really depends on the location. And unfortunately in business I don't always have a choice. Business is all about speed and convenience first.

I'm fascinated that you found a secured card in which funds may be added periodically. (My bank, HSBC, laughed at me when I asked about this, and said there's no such thing.) So please tell me: What company does this?

Thanks again

MOE

Sorry it took awhile to respond. I'm working with Digital Credit Union in Massachusetts. They have an excellent online presence and have been very accommodating so far. I've not tried to set up a secured card yet, but I will in May or June. I want to have $700 - $1000 to begin with precisely for car rental authorizations.

I can't remember the minimum, but DCU does let you increase your credit line. It may be in $200 or $500 increments. I just can't remember.

[MrOwlEye]

Good posts.

Sounds like the solution is A) get a secured credit card with the highest deposit that I can afford, and B) use that card to book travel, but use my debit card to pay for it.

[jadams]

I've done it at several locations, and been told it's company wide, but Enterprise will rent on a debit card -- in my experience it was an additional $150 charged at rental, refunded when returned.

The desk agents said they used to do authorizations/holds but too many people complained about pending charges and the like, so they made it an explicit charge you sign for and get refunded later.

Much also depends on the calibre of hotels you stay in. La Quinta is convenient and cheap to many of the locations I travel to for business. They don't charge your card when you book online. They swipe the debit card at check in, but I've never gotten any charge or hold until check out.

But when I stay at one particular Courtyard Marriott -- they authorize at check-in for the room charges plus $100 a day.

I dislike using a debit card for air travel only because it seems like most of the time I travel there's something "wrong" with some part of my reservation that involves rapid fire typing by the counter agent and an eventual "you're all set Mr. Jadams here's your boarding pass" -- but when I check my bank account for whatever reason there were multiple authorizations to my debit card as he/she reconfirmed through the various screens.

If I had been using a credit card without an excessive limit, there still would have been pending authorizations, but hypothetically it couldn't have cause me any overdrafts and I'd still have cash if necessary.

The same with hotel preauth's, etc. -- they still happen with credit cards, so if you have a small limit they can still pose a problem, it's just not your cash fronting the hold it's your available limit.

But if you were in the middle of a trip and your hotel dinged your credit card for the charges plus $100 a day, that could leave no available credit for the rental car to put a $500 preauth, etc.

[backtoschool]

BTS -- Thank you. On one hand, it sounds like a secured credit card with a healthy limit (at least a couple thousand dollars) is the way to go for business travel.

But here's the rub: Rebuilding credit (the big virtue of secured cards) means paying off the whole balance each month. Right? But when it comes to incurring business expenses --as a freelancer, anyway -- the fact is that my clients won't reimburse me much faster than 60 days if I'm lucky.

So I think I'd be better off using secured cards to BOOK travel, and (when possible) using a debit card to PAY for travel. Meanwhile I'd use my secured card for minor expenses (e.g., groceries) that I can pay off in full each month.

Given that approach, would a high limit on the secured card still be a virtue? (I'm sure I'd need enough "wiggle room" on the card to enable me to book anything to begin with.)

If you don't pay off the balance each month on a secured card you will incur interest, which is an extra expense for you.

but....

As long as you keep the balances low relative to your credit line, you should still see a fico jump.

The benefit to the large line is if you ever want an unsecured credit card. Credit issuers (especially credit unions) will often base your credit line on the largest or average size of your other credit lines on your credit reports. If you have a bunch of $300 credit lines, then a 10k line is not in your immediate future if the credit grantor uses this method as part of their algorithm for determining your credit limit. But if you have a secured card with a decent sized limit, then you will get a larger credit limit from banks that use your existing credit limits as part of their determination.

For me, I am just trying to have a few positive, open, tradelines so that I can get favorable rates on a house in a couple of years. I also want a card with a decent credit limit for business travel, since amex will never grant me credit again until I reincarnate in my next life.

[MrOwlEye]

justbroke -- Thanks for that information. The picture is gradually getting clearer....

[MrOwlEye]

Thanks. Did you apply online to get the card? Or is this where you keep your checking/savings account also?

my secured card just says AppliedBank - Platinum
it looks just like any other credit card, and if I want
to add more funds, then I just send them the min
amount that will increase the limit of the card which
I think the min increments is $100

[teacher]

Again, just to make it clear. A secured credit card is a credit card. The only person who knows it is a secured card is the bank. The account is the same as any credit card account sans the extra "savings" security account.

[MrOwlEye]

BTS -- Thank you. On one hand, it sounds like a secured credit card with a healthy limit (at least a couple thousand dollars) is the way to go for business travel.

But here's the rub: Rebuilding credit (the big virtue of secured cards) means paying off the whole balance each month. Right? But when it comes to incurring business expenses --as a freelancer, anyway -- the fact is that my clients won't reimburse me much faster than 60 days if I'm lucky.

So I think I'd be better off using secured cards to BOOK travel, and (when possible) using a debit card to PAY for travel. Meanwhile I'd use my secured card for minor expenses (e.g., groceries) that I can pay off in full each month.

Given that approach, would a high limit on the secured card still be a virtue? (I'm sure I'd need enough "wiggle room" on the card to enable me to book anything to begin with.)

[dscurlock]

my secured card just says AppliedBank - Platinum
it looks just like any other credit card, and if I want
to add more funds, then I just send them the min
amount that will increase the limit of the card which
I think the min increments is $100

[justbroke]

[QUOTE=MrOwlEye;382503]RENTAL CARS: I can't make out from several websites whether rental car companies accept secured credit cards to create a reservation. Hertz says they won't accept "prepaid" or "stored value" cards. And I know most locations (esp. the kind of heavy biz-travel places I'd be most likely to go) won't accept debit cards.[.QUOTE]I use a debit card at all the major airports. I just used it in Fort Lauderdale. I have also used it to rent from Hertz in (Charlotte) North Carolina, (Providence) Rhode Island, Orlando (Florida), (Boston) Massachusetts. I've also used a debit card to rent Rider trucks.

The only thing is, that they take an additional $200 of deposit on top of the estimated rental. I was told by Hertz, that this is done regardless of what type of card it is (debit or credit).

HOTELS and AIRLINES: Anyone know about the usefulness of debit cards and secured credit cards for booking with these guys?

Airlines will take a debit card because you're paying for the item right there. They aren't taking a "hold". Now, on the other hand, hotels are taking the debit card "in advance" of payment (because they generally charge at the end of your stay). Because of this, some Hotel chains are warning people that they take an additional hold for each night of stay, and some properties will even take an additional $100 hold on a debit card.

That has been my experience.

[backtoschool]

I answered your post in the other thread. Here is the link.

http://www.bkforum.com/showthread.php?t=52623

There are pros and cons to both debit cards and secured cards, but I think secured cards are a better way to go.

[MrOwlEye]

viking64 -- Thanks for the reply.

I agree, it does appear the debit cards can cover most things -- but it really depends on the location. And unfortunately in business I don't always have a choice. Business is all about speed and convenience first.

I'm fascinated that you found a secured card in which funds may be added periodically. (My bank, HSBC, laughed at me when I asked about this, and said there's no such thing.) So please tell me: What company does this?

Thanks again

MOE