I'm trying to help someone repair her credit. She has no positive tradelines. I recommended that she apply for a Capital One secured card, but she was turned down. I don't understand why they would turn her down, since she's just borrowing her own money. Are there any good alternatives? Thanks!
Do you know her FICO scores? Cap One doesn't decline many people for this card, but it does happen. She may also want to check into what a local credit union has to offer. The Continental Finance Matrix card is another option to consider. Based upon her credit, they will offer either an unsecured or secured option similar to what Orchard Bank used to offer.
Thanks for replying. Her Experian is 588. She has two collections and no tradelines. The local credit union wouldn't give her a card because of some bad account with a bank that she says she has no knowledge of (they checked some interbank system). I'll see if she wants to give the Matrix card a try. $75/yr + $12/mo fee seems awfully high.
If she goes with the Matrix, she should never use this card for longer than the first year. They don't charge the $12 monthly fee until the second year, so make sure the card is canceled before then. If the card is used appropriately (low utilization, paid on time each month), then she shouldn't need to use it longer than 6-12 months to pull her credit scores out of the bad credit range. $75 is still a high annual fee, but unfortunately there aren't many bad credit options left on the market.
Another way to increase your friend's credit score so they can get approved for their own credit card is to add an authorized user account to their credit. They could ask a friend or family member that they trust to add them as an authorized user to one of their existing credit card accounts. Just make sure the credit cards has perfect payment history and they are able to maintain a low balance (10% of the balance). The higher the credit limit and longer the payment history the bigger the boost in their credit. Thanks! Heather with BoostMyScore.NET
A $75 annual fee on a secured credit card is high enough, but a $219 annual fee (which is what the $12 monthly "maintenence fee" makes it become) is just absurd. There are many legitimate banks which offer secured cards to people with poor credit, and while they all charge annual fees, none come close to what these people are charging. This is just a scam preying on the desperate.
I agree that the $12 monthly maintenance fee from the 2nd year on is ridiculous, which is why this card should never be used past the first year. A $75 annual fee is high enough, compared to the Capital One Secured Card at $29 and what many credit unions offer around the same range. But if this person was denied by Capital One, denied by her credit union because they ran a Chexsystems report and found negative info., and has a FICO score in the mid-500's, she would most likely be denied for any comparable cards to the Capital One Secured (e.g Citi Secured, WF Secured). What other secured cards for bad credit do you know of that she would likely get approved for? With Orchard Bank no longer around, options are really slim these days.
Try the Applied Bank Gold card only $50 a year and only $200 to start. If you choose this card deposit at least $250 so that she will have $200 to work with. I read in one forum where a guy had a low fico score in the 500's and used an Applied Bank card and raised his score to the high 700's. I have learned to build credit don't use it. Buy small items and don't use more than $20 for the first 6 months and watch her score go up.
Here's a list of the secured options we recommend. First Progress cards have low APR's and pretty modest annual fees. The catch is that they're not available in 4 states: AZ, WI, IA and NY. Check them out here: Secured Credit Cards For People with Bad Credit - Creditnet.com
Open Sky is actually a really good choice. As you point out, they recently lowered the annual fee to $29. The ongoing APR is lower than that of the Cap One Secured Card, and the min. credit line required ($200) is lower than any of the First Progress cards. This is absolutely a card that could build your credit w/ responsible use - here's our full review so you can get the complete details: Open Sky Secured Visa Credit Card Review - Secured Credit Cards - Creditnet.com
Thanks for sharing these post ,I just want to ask one question,Do you understand her FICO scores? Cap One does not decrease many folks for this card, however it will occur. She may also need to look at what a local credit union has to provide. The Continental Finance Matrix card is another alternative to contemplate. Based upon her credit, they'll offer either an unsecured or bonded option similar to what Orchard Bank used to offer.
Open Sky does not require a credit check, so this card won't hurt your score upon application. (A fellow forum member pointed this out last week; I double-checked their website and sure enough, that's the case. Thanks Vettecor!) Between the Open Sky and the Matrix, I'll take Open Sky since there are fewer fees. The unsecured Matrix offer requires monthly fees in the second year of cardmembership on top of a pretty exorbitant annual fee. Open Sky has one flat annual fee, and the deposit is fully refundable.
After hearing the attractive features from you about open sky my mind is attracted towards the schemes offered by it and thanks for sharing this informative comment it will definitely help me and others too.
