Another question about trying to fix my credit. Would appreciate knowledgeable answers.?

Question

Over the past several months, YA has been a huge help to me in fixing major credit problems I have had. I have been working very hard at dealing with creditors on old in-collection debts. Now that I'm almost done with paying them off, I get a "Pre-Approved" credit card offer in the mail from First Premier Bank, which specializes in people with "less than perfect credit." Because I'm older, my fear has been that it will be incredibly hard for me to get credit again, so I'm curious if this would be good or bad for me to take advantage of. It definitely says that I am "Pre-Approved", so should I go ahead and get this card so I can use it to begin rebuilding my credit rating? I wouldn't bother with it at all, except for the words "Pre-Approved". NO, I do NOT want to go out and start charging - I just want to be able to have it to rebuild my credit rating. There are some fees tacked onto it, but I thought I would send this question out there to see what people's thoughts are. Thanks

I waited too long and missed the opportunity to choose my own "Best Answer", so I'm voting now for "Financing_Loans". If you see this, thank you (and everyone else for that matter) for your very knowledgeable and well thought-out answers. I appreciate it very much!

Answer 1

Read the bank of it very carefully. It might say something on the front that says guaranteed approval up to 250 dollars minimum.

Here is your problem, you are 100% approved. For the 250 dollars. When you read it it might say on the front that there is a 30 dollar processing fee, or they might charge that to your card. So you get a 250 dollar credit card. They take out 30 bucks so you have 220 left. Then they have a 1 time enrollment fee of 199 dollars. So you have a credit card that you owe 230 dollars on, plus their 5 dollar monthly fee with a balance. So you have$15 dollars or available credit of the $250.

Read it very carefully. I suggest getting a security credit card, most banks and credit card companies will do them. You give them 200 dollars they give you a credit card with 200 dollars. Its not a Visa Cash Card. You use it like a credit card. You charge 50 bucks on it, you get a bill once a month for that 50 dollars you owe. Your minimum payment is 10 bucks and you have to pay it. It will never come out of your deposit. You will get a late fee and late payments on your credit if you dont pay on time.

You can get 2 or 3 of these. Credit Reporting agencies dont know the difference and it will help your credit. But keep the balances running, but running below 30% of your availiable balance. Anything over that will hurt your fico score.

Over time the 200 deposit that they have they will raise your credit limit to say 500 without you having to deposit more.

Good Luck, but double check that pre-approved credit card offer.

Answer 2

I do not know what your prior debts were but congratulations on getting back on track with your credit. I would suggest that you shred any credit card offers that come in the mail.

Instead, work with a local banker or credit union. Ask them to work with you on a low limit credit card "about $500.00" at a acceptable interest rate. Because of your past history you will pay a higher interest rate, but if you pay off the amount you charge every month on time you will not incur interest on the balance. Let them know you are trying to rebuild credit and see if they will work with you.

Try that first before resorting to high fee, high interest offers.

The best thing for you is to get debt free if possible. Then try and get a loan for furniture, a car or even establish credit through a tire store that reports your credit history.

Good Luck, having your debt managed instead of it managing you is a great feeling.

Answer 3

After my bankruptcy back in 2001 First Premier was one of the first credit cards I got to help re-establish my credit. The other was Orchard bank.

I used them both for everyday things like gas and food and never exceeded 30% of my credit limit in any given month and paid in full before the due date.

This does two things, first it establishes a payment history and second it keeps your debt to credit ratio very low. These two things alone make up 65% of your credit score.

After about 12-months I got two other good credit cards and did the same thing with them. By the time another year had passed I had raised my credit score over 150-points.

Answer 4

If you're reestablishing, I would steer clear of any card that has fees.
Just b/c you have been pre-approved, you still have to technically apply for the card and they can deny you based on your credit report. Since you are almost done with your work (and many, many kudos to you!!), they might see the remaining blemishes and deny you.
Personally, I would wait until everything is cleared up and then apply for a card that YOU want, not one that comes to you.
And if you only want one with a small limit that you would use occasionally, you could apply for a department store cc...they tend to be a bit more lenient with their standards.
Good luck to you! :-)

Answer 5

financing_loans has good information. You probably won't have much available credit after the fees.

Why do you need to improve your score? Do you see the need to charge in the future? I would suggest making an emergency fund and forgeting the credit card. Pay cash. That way, you don't worry about the possibility of future credit problems.

Answer 6

if there were fees imposed, I would stay away from the card.

Credit knows now age.

Just keep working on paying things off and by doing what you are doing right now, you are rebuilding your credit without even knowing it.

So stay away from any credit cards that have fees...you don't need that when you are trying to get back on your feet.

Answer 7

stay away from the credit cards. They are snakes and will bite you any chance they get. They make the rules and change the rules in the middle of the game for any reason. You have your mess cleaned up do fall into the same trap again.
Do a written budget and get a emergancy fund in the bank.

Answer 8

you sound like you are kicking some butt and going strong...dont f it up by going for a high fee card...you have come too far to let it slip away..keep doing what you are doing and you will reach pimpdom soon enough