Loans Answers

Attention! Looking for People with No Credit or Bad Credit!

Question: Sometimes the credit line is somewhat lower than the deposit, but it’s >: usually at least 90%. Also, Bank of America and Citibank won’t even give >: secured cards to people who have filed bankruptcy. Pretty stupid if you >: ask me – what’s the point of having a secured card if you don’t have shitty >: credit.

>Signet’s secured card offers 150% of your deposit as a credit line. For >the mathematically challenged (let me get my calculator!), you’d get a >$750 credit line if you were to deposit $500, for example.

Answer: Actually, the easiest way for someone with bad credit to get credit is to file for bankruptcy!

I filed for Chapter 7 recently. About a month later, my mailbox started filling-up with offers for credit cards. Some of the secured cards are pretty slimey (NO grace period and outrageous interest rates) so don’t jump at the first one you get.

I received an offer from Signet Bank for a secured card “pre-approved”. I was skeptical, as I received a similar offer before the bankruptcy, and was turned down – they sent my check back! However, Signet *did* issue the card, despite the fact that the bankruptcy is not yet discharged. (They did not give me 150% of the balance, however – Signet is apparently a big bank, I suspect they have various programs.)

A couple of weeks later, I received another “pre-approved” offer, this one from First American Bank in Irvine, CA. This was for a $2500 NON-secured card. I have sent this in and will report back what happens.

Both of these specified a limited time period for acceptance – Signet was a month, First American was 2 weeks. Any idea if there’s a real reason for this other than as a marketing ploy? My guess is that they know you will receive other offers, and want to get in quickly before you get other credit – perhaps if you already had X number of cards, you would not meet their criteria. If that’s the case, it pays to choose wisely, and not get the wrong card, as it might be a while before you can get another one.

I also received an application from a Gold Master Card ($5000-$10,000) from First U.S.A. Bank. This one did not specifically mention “bad credit”, “pre-approved” etc. and, in fact, was aimed at people who already have credit cards. (“transfer your balance”). It appears to be a pretty decent gold card, with interest rates lower than many of the popular gold cards (currently 11.9% – 6.9% for a limited period if you transfer your balance from another card), plus a bit more than the usual set of amenities. However, I suspect this might also have been triggered by the bankruptcy, as I never spell my name in full – I can pretty-much tell what mail I am getting as a result of the bankruptcy filing. (Most offensive: Fingerhut, offering to sell me crappy merchandise at a 30%/year finance charge…)

I should point-out that my bankruptcy was the result of federal taxes that were not paid several years ago, and that I have no recent bad credit history. The only thing on my credit report is the Federal tax lien. (In fact, I have no recent credit history at all.! ) I have a fairly high income (~$70K/yr) also. I suspect this is somewhat of a credit-card issuers dream come true – high income and can’t bail on them for the next 7 years.

My attorney said that it is routine to receive offers for credit cards, car loans, etc. after filing. Many issuers consider this a very good risk, because these are people who’ve just had the bejeebers scared out of them, and, like I said, can’t re-file for 7 years.

I am just grateful for now being able to rent a car, make a hotel reservation, etc. and no longer having to make excuses for not going on business trips, having to COD anything I buy through the mail (many employers just expect you to have a credit card and be able to order incidental items and expense them) etc.

Signet Bank’s address is:

Secured Card Department 11013 West Broad Street Road P.O. Box 85547 Richmond, VA 23285-5547

You may also be able to get an application by calling their customer service department at 1-800-285-5573.

Note that Signet’s interest rates are high (currently about 20%) but they do have a 25-day grace period unlike many of the secured cards. Their fees for late payments, bounced checks, etc. are also high – high enough that they have to chop them to comply with the laws in several states. Of course, this is probably not a really bad idea for people needing to develop the discipline to re-build their credit…

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Filed under: Bad Credit Loan