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Hi, everyone!
Several decades ago, two Asian immigrants arrived on the shores of the USA. Of course, that means their American credit history was non-existent. A few decades later, they both have excellent credit, with credit lines of 1x,xxx on all their cards. These two people are my parents.
My dad started out with a Citi secured card with no annual fee (how great it was back then…) to build credit history. After a year, he was able to get an unsecured credit card from Citi. A few years later, my mom also got her first credit card from her bank. Since both of my parents are very conservative with their money, they have always, ALWAYS paid their bills in full and on time. Thus, their road to credit was very smooth.
Fast forward to now. I am a 20-year-old full-time college student trying to establish her credit. I do not have bad credit history, just no credit history at all. I also work part-time and have some savings, so I started thinking about credit cards. I view being able to start managing my finances, which includes having credit cards, as a first step towards having financial independence and I value that highly. Because of the CARD Act of 2009, it is now much harder to get unsecured credit cards, even student ones. I tried for 3 different ones and was denied instantly. I decided to go the secured card route since that seemed to be the only way. I was instantly approved online for the Capital One Secured Card with a minimum deposit of $49 for a credit line of $200. I was ecstatic at finally being approved for something! Because I have grown up with my parents drilling into me the importance of financial responsibility and I am also very conservative with my money (never was a big spender), I will take care of this card to build my credit.
My personal tip that I will also be following: treat credit cards like debit cards with NO OVERDRAFT PROTECTION! Only spend less than what you can afford, because you need some savings in case of emergencies.
My Credit Plan
I plan to use the secured card for small purchases, less than 25% of credit limit monthly, and pay on time and in full every time. I plan to use the card for about 7 months and then try applying for an unsecured student credit card again at that time. If I am successful, I will then cancel the secured card and keep the unsecured card to build credit. I am hoping to be able to get several student cards (not all at once) by the time I finish college, which is in about 2 years. Since it is generally easier to get a card when you’re a student, I hope to get the cards and be able to let my accounts age by the time I graduate so I do not have to worry about obtaining new credit cards. Sort of like, “set it and forget it” (NOT forget the payments, lol) so I can build history and grow with different banks and upgrade to better cards in the future.
Below is my timeline with this card so far (will continue updating this thread as I move along):
8/30/11 – Applied online for the secured card and was instantly approved. Also sent in my $49 deposit electronically.
9/1/11 – The deposit cleared out of my bank account.
9/6/11 – Received my “you’ve been approved” letter from Capital One in the mail, telling me to deposit my money if I haven’t yet.
9/16/11 – I called Capital One because it’s been a little more than 2 weeks since my deposit cleared and I have not received card yet. They told me they were experiencing delays and that my card should arrive within 2 more weeks. Strange thing is, they said the deposit hasn’t posted to my account yet! It seems to take really long for the deposit to be posted.
9/27/11 – Received e-mail saying my card has been shipped yesterday (9/26) and I should receive it within 7 business days. **jumps for joy, yay finally!!**
I will update once I receive my card.
HI Amy and welcome to the forums!
Congratulations on being approved! Not only is your post informative but you can definitely tell a story. Thanks for sharing it. I wish I had been as responsible and smart as you when I was in college, it would’ve saved me a lot of headaches. Having a plan and following it is very important and you’re definitely on the right track!
Quote:treat credit cards like debit cards with NO OVERDRAFT PROTECTION! Only spend less than what you can afford, because you need some savings in case of emergencies.Excellent advice! I’m trying to follow this myself (but came to this conclusion only after doing the opposite and ruining my credit). I find it easy now that I have a low credit limit, let’s see how I do when I have more. I like thinking that I have learned my lesson.
If you don’t me asking, what credit score do you have when you don’t have credit? I know I didn’t check my score until i had ruined it, so I’m not sure what mine was when I didn’t have any credit. I’m sure your score will change once your card shows on your report, which I suppose will happen after your first statement.
Keep us posted!
Thanks! I’m glad my post is informative.
I used the free Credit Karma to check my score and it couldn’t give me one because I have a “thin file”. Also, when I received the denial letters for the unsecured credit cards (since creditors have to state denial reasons and may also provide you with the score as well), all of them said my score was unavailable. After browsing around for more information, I found out that FICO scores are only generated when you have at least 6 months of credit history.
My card arrived today, 9/28! It took about 2 days for the card to arrive, since it was shipped on 9/26 according to my e-mail notification. I just activated my card and enrolled in Capital One online banking. I will make my first purchase to test out the card tomorrow. The annual fee charge did not show up in online banking yet, but I’m sure it’ll show up there soon.
I choose not to enroll in CreditInform because I do not want a separate service to cancel when I decide to cancel the card. I will be using Credit Karma to monitor my credit and see the FAKO scores. Perhaps I will purchase my FICO scores after 6 months to see what they are.
Credit Karma is free, and their database of credit card reviews has very useful statistics (average credit scores approved, user age, income, etc.). They provide FAKO scores and a credit “report card” that analyzes factors affecting your credit score. They also have a bunch of other useful free tools. Here’s the URL: http://www.creditkarma.com/
9/29/11 – The annual fee of $29 has been posted to my account. I made my first purchase with the card last night and the transaction showed up in online banking today as well.
Just a note, Credit Karma provides TransUnion FAKO scores. I found a new website, Credit Sesame, that shows Experian FAKO scores.
It’s going good with the card. Since my last update, I charged the card once more and I think I am done for this month, keeping the balance low. I’m waiting for my first statement to cut in a few weeks so I can pay it. I hope the card reports to the bureaus after my first statement. I’ve heard that Capital One can be slow at reporting for the first time.
10/17/11 – First statement generated and is available for viewing online. I see a “payment due date” of November 12, 2011 in online banking. Very excited to get my first statement (doesn’t that sound strange, haha!) because that means I am starting to build credit once they report to the credit bureaus. My statement is for Sept. 21 to Oct. 15 and it says 30 days in the billing cycle…wow, that was 30 days already? That means they started counting my cycle from when they set up my card account probably, since my card was shipped on 9/26/11 according to e-mail notification and I received and activated my card on 9/28/11, which was only about two and a half weeks ago.
10/19/11 – Paid my first statement balance in full via Capital One online banking. I entered my bank info around 3pm and payment was posted to my account by midnight of the same day. Funds were also taken out of my bank on the same day and payment was completed. That was very fast! My full credit limit is available again and it did not even take a full day.
I really like the Capital One online banking website. The layout looks very clean and it is easy to use.
10/21/11 – Called to enroll in the CreditInform credit monitoring service and ask them a question about how long this service is free for. They said it is free for how ever long you have your secured card open. That is good to know! I should receive my welcome kit in 5-7 business days.
I mostly want this service to monitor when Capital One reports my account to the bureaus. I do not really care for the credit scores provided by them since they are FAKO scores, and I won’t have a real FICO score until I have 6 months of credit history anyway. Will update thread if I see that Capital One has reported my secured card account to the bureaus.
Hi I’m new to the forum!
I applied for the Capital One Secured Mastercard! Don’t know credit score when I applied (sorry)
I applied for the card on 10/19/2011 got the message $49 deposit $200 limit!
Sent my deposit on 10/21/201.
Took my deposit out of bank on 10/25/201.
Just got my letter saying I was approved! Yay
But I also got this email just about a hour ago:
Pamela
Congratulations! We recently approved you for a Capital One® Secured MasterCard. You are just one step away from getting your card. Now you just need to make your fully refundable security deposit.
Complete your deposit online or by calling 1-800-219-7931 within the next 72 days.
If you recently made your full deposit, please accept our thanks. We will mail your card within 2–3 weeks.
Remember, your new card reports automatically to the three credit bureaus, provides free enrollment in CreditInform®*, and brings you opportunities to earn credit line increases with responsible use. More information will be included in your welcome kit, which you’ll receive after you fund your card.
I was wondering if the time line is right? I was reading where some of you guys got the message would be sent in about 7-10 days. Sorry .
Hi guardmom and welcome to the forums!
Congrats on your new card. So we can all comment on your post and not take over Amy’s topic, please create a new thread and copy and paste your timeline. It’ll be easier to answer your questions and follow your progress with the card if you have your own thread.
This is very easy to do. On the forum’s homepage there’s a link saying “Topic: Add New” (just click on that every time you want to create a new topic). Or just follow this link to create a new topic: http://www.newdirt.org/forums/?new=1
I should’ve been able to move your post myself but I just found out this software doesn’t have this feature. Thanks!
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