Mr. A Graduated – Bank Secured Credit Card Becomes Unsecured



Last year, Mr. A and I went down to the bank and had him sign up for a bank secured credit card so he could start building credit in his name.
He used cash only for many years and the credit bureaus didn’t even know who he was when we tried to pull his credit scores.

During sign up, we were told the secured funds would be held for one year, then the bank would assess how the card had been handled and dependent on that assessment would then make the final decision to upgrade Mr. A to an unsecured credit card.  It’s been a year so I called the bank to find out what to do.  The banker I spoke with said we would get notification by mail.

That notification arrived a few days ago, and Mr. A had indeed “graduated” to an unsecured credit card.  They said he was being offered a low interest rate which we discovered while reading the fine print would be 16.99%. I guess lower than the unsecured credit card, which was 24.99%. No yearly fees, that’s good.

The secured credit card had a limit of $600. As soon as the bank receives the paperwork, they will begin the process to open the new card, transfer the remaining funds on the secured card to the new card, and will mail the $600 back to us in the form of a check. The limit on the new card is $1100.

Now I have one more card of which to keep track. I think what I’ll do is continue to use it to buy gasoline, and have an automatic pay in full payment set up so that I won’t need to worry about making sure the payment is made on time. That’s the last thing I want to do is undo all the work we’ve done over the last year to get some credit built up for Mr. A.

This process was rather painless, and the bank said we could set up the secured card for any amount starting from $300. We decided to go with $600, and I wonder if that had anything to do with the unsecured credit card’s limit being started at $1100.

Now I need to talk to my sister again and tell her she really needs to get this process started for herself. The last time I talked to her she fussed about how she can’t afford to put $300 into a secured card. The thing is, she can juggle the money back and forth every month, and in so doing, eventually build her credit score. She really would like to buy a home one day and this will be an important step that she should begin sooner than later.  I don’t know if you can buy a home nowadays without having a good credit score, unless you can afford to pay cash for the entire mortgage.  Wouldn’t that be nice to have that much money lying around? Since that probably won’t happen for myself or my sister, she should make this a goal and consider it the first step to buying a home for herself.

Have you ever built credit by using a bank secured credit card?

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2 thoughts on “Mr. A Graduated – Bank Secured Credit Card Becomes Unsecured

  1. NO-NO-NO-NO When will people learn. Credit cards are evil! Take the bait, and you are handcuffed for life. What a shame. If you don’t have it you can’t spend it.

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