My Secured Credit Card

I used to have excellent credit. Then Josh took over paying the bills. Basically, it meant we had to spend years without either of us having a credit card and I took over the finances. We used debit cards for online purchases and cash for everything else.

In January, enough time had passed for me to apply for a secured credit card. This is how secured credit cards work. You put a certain amount of money into a savings account. That is your credit limit. You have to apply for the secured card and some will be turned down. I was accepted for a nice credit limit but we put less in the account as my credit limit.

The point of a secured credit card is to help someone build a credit history. Most if not all banks offer one. I had been told that if I was responsible with the credit card, I would automatically graduate in seven months. More on that part later.

My approach to paying all monthly bills is to send the check the day the statement is ready. By all I mean credit cards, energy, utilities, and insurance. But, with credit cards you need to be careful of your credit limit too. My secured card was a smaller limit then I really needed. So I paid it every week. It was always paid in full and on time. I never went above the credit limit. Doing that kept the limit under control for the month.

It's important that I add that I never save any of my credit card numbers anywhere. I take the steps to delete them after purchases. That's for security. I check the accounts each day for security as well as statement status. When someone was using my card number in May, I caught it the next day. They didn't get much. Since then I check the credit cards multiple times a day.

I didn't graduate from a secured card after seven months.. My bank didn't check my credit report after seven months. They only checked the activity on the secured card. Since I never carried that big of a balance, the automated system didn't approve me. That's just a guess. No one could figure out why I never graduated. That includes employees at the credit card company. Again, everything was always paid in full and on time. There is no real reason to not automatically graduate me.

Unless they wanted me to apply separately for an unsecured card. I had gotten approved for more then one credit card since getting the secured card. That separate application means they can check my whole credit report. Not just the one card. I have a good credit report and have the entire time since getting the secured card. I applied with my bank for an unsecured card. It arrived in the mail today. I canceled the secured card today and paid it off.

Soon that "hostage" money will be released. The money used for the credit limit. It will remain in savings. In December I would have had to pay an annual fee to continue with the secured card. I had already gotten a different unsecured credit card. I didn't need the secured card anymore. So I planned to cancel it whether I got approved for the bank's unsecured card or not. I wasn't surprised to hear I had been approved.

I don't know what a financial advisor would have told me to do. Length of credit is important. But, the first store card I got is only a few weeks newer then that secured card was.

For longevity it would have been better not to cancel that secured card. But, I also avoided an annual fee and freed money for savings. I have all of the cards I need without the secured card now.

Would I recommend a secured card? ABSOLUTELY!!!! Especially for college kids! It's a good way to establish credit without being able to get out of control. It's also great for others like us. Reestablishing credit is important. It's easier to get approved for a secured card, but not guaranteed.

It feels good to have good credit again. Between cash back and store discounts, we have made and saved a nice amount of money this year. Money we missed out on when we couldn't get credit.

Credit is very important in America. The secured credit cards came out of the Great Recession. A way to help people get back on their feet. If you can't get an unsecured credit card, try to get a secured card. There are good ones out there. I might have canceled it today, but, my secured card was the helping hand I needed to get back my good credit.