[1babysmom]

A secured CC is our only option, apparently. We've been trying for a few years to get credit, but that's apparently impossible without credit. (Even though it seems we're the only one that simply CANNOT find a way to get a credit card or build credit!!) We are VERY financially responsible, but we just have GOT to start building credit and we just can't!! We're a young married couple, neither one of us has any credit, so we've tried applying for cards (major cards, store cards, student cards- yes, as FT students, etc) and never get approved because we have no credit. We can't make payments on something (like buy a new w&d and build credit that way) because everything here requires credit to open an account. We can't take out a small loan (yet). So our bank is offering a secured CC next month and we're definitely going to take it...but there's only one problem...I don't know what a "secured" CC is.

 

[velochic]

In a nutshell, you give the bank or credit card company an amount of money... sometimes the limit on the card and sometimes a little more... and in return they give you a card. You're right that it's a way to build credit. Read the fine print on the contract, though.

 

[mightymoo]

Huh, I never had that problem - they were perfectly willing to give me two credit cards as a student with no job. Did you try citibank? they were always the ones I could get credit from (and gave me that first $500 card in college), but maybe policies have changed since I was in school.

A secured credit card means you secure the credit line with cash. You give them $500 say and they give you a credit line for $500. It's pretty ridiculous when you think about it, since you'd pay interest on any balance you had, even though you are basically giving them the money interest free - but I'm assuming you won't carry a balance anyway, just charge it pay it off and build credit enough to get a regular credit card then close the account.

Some info I found on secured credit cards:
http://www.ftc.gov/bcp/conline/pubs/credit/secured.htm
http://www.bankrate.com/brm/news/cc/19990823.asp
http://www.fool.com/ccc/manage/manage03.htm

Sounds like there are a lot of scams around secured credit cards so be careful.

 

[1babysmom]

Thanks! Yep, we tried Citi. They were a no-go too.

We're doing the card through our bank (Washington Mutual), so if anyone has experience, I'd be happy to hear!! So we've got to PAY them for the card?? (Sorry if I'm sounding stupid...I don't understand any of this darn stuff) Or can they just link it to one of our accounts there?

 

[mightymoo]

Quote:

Originally Posted by 1babysmom Thanks! Yep, we tried Citi. They were a no-go too. We're doing the card through our bank (Washington Mutual), so if anyone has experience, I'd be happy to hear!! So we've got to PAY them for the card?? (Sorry if I'm sounding stupid...I don't understand any of this darn stuff) Or can they just link it to one of our accounts there?

I've never actually owned one, but I think you do need to pay them for it, becuase of course you could just take all the money out of the accounts you have and run up the credit card and they would be out the money. It's not realy 'paying them' becuase if you close the account, you get the security deposit back. It's like when you buy a house, they give you a huge mortgage, but its secured by the house, so if you default on the loan, they can take the house. Similarly, this is a small line of credit, secured by cash, if you default on it, they have the cash, so its no risk for them. But if you pay everything on time, etc you can get the cash back when closing the account, so you would only keep it open until you were able to open another regular credit card, then switch to using that to build your credit.

Have you looked into adding a visa debit card to your checking account and/or a line of overdraft credit? I'm not sure the visa debit card would help with credit really (don't remember ever seeing it on my report), but I know they would report a line of overdraft credit to the bureaus, having had one.

 

[1babysmom]

Quote:

Originally Posted by mightymoo Have you looked into adding a visa debit card to your checking account and/or a line of overdraft credit? I'm not sure the visa debit card would help with credit really (don't remember ever seeing it on my report), but I know they would report a line of overdraft credit to the bureaus, having had one.

Yep, we've had a debit card with our checking acct (first Visa now MC) for over 3 years now, but it doesn't affect our credit.

This credit stuff sure is a sticky situation. And it irritates me to no end knowing that illegal immigrants can get cards through BofA (at least that's what was happening at one point...don't know if it still is). Or that my irresponsible college student friends who've already racked up years of debt can get one SOOO easily. But my husband and I- responsible, hard working, tax paying, and debt free- can't get one no matter how hard we try.

:

Vent over.

 

[grniys]

When dh and I first got married we were strait out of high school and didn't have any credit. To build our credit we got a secured credit card through our credit union. What happened was we went to the credit union, filled out papers and transfered $500 from our savings to the credit card. The credit union then held that $500 for one year while we had our credit card and made payments on it and such. At the end of the year our credit card became a regular one and we got our $500 back. We also have good credit because of it, and have gotten tons of other credit offers since then. For us, it was a great way to start. We still have that credit account open, though it's not secured anymore.

ETA: I forgot to say, when we signed up for our card the agreement was we couldn't close our credit card account for at least the first year. So we had to commit to at least one year of our credit union having the $500, and us having the credit card. We never actually "paid" them for simply having the card. They just held the cash for a year as a deposit in case we never paid our bill.

 

[shelbean91]

We had a secured card to rebuild credit after bankruptcy. Basically, we gave them $1000 deposit and had a $1500 credit limit. We made interest on the $1000 deposit. Then, we had the $1500 card to use as a credit card. The merchants don't know it's secured or not, only the bank issuing it. At the end of the year, you can usually get your deposit back and get it changed to an unsecured card. If not, you can pay the balance, cancel the card and get your deposit back plus whatever interest you earned while they had the money. IME, the larger deposit you give, the greater your credit line. Sometimes, you only get credit line equal to the deposit, sometimes you can get 1 1/2 or 2x as much as the deposit.

as long as it's with a reputable bank, I wouldn't worry about it.

 

[Dov'sMom]

You are paying them in a way, because they don't give you interest on your deposit.

Did either you or your husband apply for credit when you weren't a student? That could be your problem -- if you applied for credit w/o being a student, you would have been denied for lack of credit record. That denial would have created a negative credit score, so even when you were a student, and eligible for a card w/ no previous positive record, the negative score created by your denial of credit would make you ineligible.

Best option is a secured card. If your only black mark is denials of credit, that should wipe it clean.

The other possibility, of course, is identity theft. Have you gotten copies of your credit records to prove that no one else is using your SS#?

 

[Dar]

I did this back when I was 18 or so... and I did get interest on my deposit. It was just like a savings account.

I couldn't get one because I was living on like $6K a year and I wasn't a student...

dar

 

[sonrisaa29]

Quote:

Originally Posted by 1babysmom Thanks! Yep, we tried Citi. They were a no-go too. We're doing the card through our bank (Washington Mutual), so if anyone has experience, I'd be happy to hear!! So we've got to PAY them for the card?? (Sorry if I'm sounding stupid...I don't understand any of this darn stuff) Or can they just link it to one of our accounts there?

I would just say be careful about applying for too many credit cards because I believe that goes on your credit report.....

 

[1babysmom]

Quote:

Originally Posted by Dov'sMom The other possibility, of course, is identity theft. Have you gotten copies of your credit records to prove that no one else is using your SS#?

Yep...we looked into this a few months ago because we wondered the same thing. It's all clean! Just no credit!

 

[1babysmom]

Quote:

Originally Posted by sonrisaa29 I would just say be careful about applying for too many credit cards because I believe that goes on your credit report.....

Yeah, we found that out last year after we'd already applied for a few. I tell ya, getting a credit card from this position feels like it's a scam.

 

[Lady Lilya]

If you have an account with a phone company, electric company, etc, then usually that builds up your credit a bit.

I was only able, at first, to get a charge card from American Express. It had an $80 annual fee. The following year, I discontinued it and got another AMEX for only $20 per year. Then I had enough credit for a 0 annual fee credit card.

Charge cards are different in concept from credit cards. Technically, they just prevent you from needing to carry cash, but you are expected to pay the full balance every month. It is not meant to be a loan. I use my credit cards like a charge card.

Applying for a lot of cards will harm your credit score a bit. Each time a company checks your credit record, it lowers it. The assumption is that you are more risky because you are borrowing a lot.

But, having a lot of unused credit is supposed to be good. So, if you get several cards and don't even use them, you show a lot of available credit. However, this is riskier for identity theft. Ideally you should have very few cards with very high credit limits.

 

[Merilin]

I am in the same boat and have so far tried to go through life without having any credit history. I have a debit card, I pay my bills regulary etc. but none of these things help to build a credit. I tried applying for a small loan to build up credit, and although I had more than the loan would have been in savings, and I do have a very small but regular income, the loan was denied "because I don't have a credit history".

My husband started out with the same starting conditions and got his cc without any problem, from the same bank, where I have been denied. Thus, we have the car insurance, etc all running via his credit history, as with no credit the prices are quite a bit higher.

Our next step (I keep forgetting to do so), will be adding me to my husbands cc, which we were told would then cause his credit history to somehow convert to mine, and I suddenly would have positive credit. Maybe you could ask one of your parents to ask them to be added to one of their accounts for a while?

 

[Dov'sMom]

It won't "convert" his history to yours, but that card and all the information on that card will go into your credit record to give you some history.

Call the company and make sure they;ll report the card in your name too. Some cards won't report you if you are just an "authorized user" -- some will.

 

[ustasmom]

Ask a family member (with good credit) to add you as an authorized user. You don't even need the card. Then, as the original card owner makes payments, they will report on your credit report. That will get you going.

I had the same problem with my 18yodd. She couldn't get credit because she didn't have a credit report. Once I had an account report with her as AU, she started her own file and now she can get credit on her own.

 

[PajamaMama]

When I worked at a credit union many years ago, they offered a secured credit card that was secured with a CD. (certificate of deposit) I think it was a $1000 CD, and you got a credit card with a $750 limit. The $1000 was still yours, you earned the same rate on the CD as anyone else with a CD, and it was a good deal for the students overall, in my opinion. The credit union was USF Federal Credit Union (in Tampa), in about 1995. If your husband is a student, have him check the credit union at his university to see if they offer a similar deal.

 

[Lady Lilya]

Back in the 70s, my mother applied for a credit card from Sears. She was working regularly with a decent income. They denied her. They gave one to my father, who was unemployed, because he was a man. To this day my mother is furious at them and won't get a Sears card.