Higher Limit Secured Cards = Better?

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kcarter609
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Higher Limit Secured Cards = Better?

Postby kcarter609 » Fri Mar 08, 2013 6:54 pm

Hi guys,
I was just thinking today about people who start with no credit. Most people get a secured credit card with a limit of $300-$500. Now, would it make a difference to lenders if you had a secured card with a limit of $2k for 6 months - 1 year vs. a $300 limit card? For example, could you apply directly for a Chase Freedom or something after a year and get a reasonable limit?

Just wondering on this one.

Active Cards:
Chase Freedom 10+10 Visa Signature ($9k Limit - 8/2012)
Chase Sapphire Preferred ($10k Limit - 2/2013)
Chase Ink Plus ($7k Limit - 2/2013)
Discover IT ($9.5k Limit - 10/2012)
AMEX Zync (No Pre-set Limit - 1/2010)
AMEX Blue Cash Everyday ($20k Limit - 1/2013 - Backdate to 1/2010)


DavidNY
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Postby DavidNY » Fri Mar 08, 2013 7:29 pm

If someone had a BofA secured card and then applied for a Chase Freedom, Chase would see the BofA card on the credit report which looks like an unsecured card.

Daniel
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Postby Daniel » Fri Mar 08, 2013 7:32 pm

kcarter609 wrote:Hi guys,
I was just thinking today about people who start with no credit. Most people get a secured credit card with a limit of $300-$500. Now, would it make a difference to lenders if you had a secured card with a limit of $2k for 6 months - 1 year vs. a $300 limit card? For example, could you apply directly for a Chase Freedom or something after a year and get a reasonable limit?

Just wondering on this one.


That is funny, I have actually wondered about the same thing. Most definitely it would make it easier for one to maintain a proper credit utilization, but would your card get upgraded to an unsecured card at the same limit level? I am almost have tempted to try it with a BoA secured card just so we could definitively know whether your limit would stay the same after going unsecured, but we would need a Guinea pig willing to deposit 2k into a secured card while starting their credit journey do determine if they could go right for a Chase Freedom or something to that effect. Does anyone else have any insight into this?

credit_card_fonz
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Postby credit_card_fonz » Fri Mar 08, 2013 7:55 pm

starting from a low credit score, it won't affect the scoring system as the scoring system looks for utilization and accounts reporting in good standing. So the score will raise at the same rate if you have a 200CL charge $10 and PIF or if you have 2,000CL and charge $500. Where it matters, lenders do like to see you managing 2 to 3 lines of credit with an average of at least 2,000CL. I've heard Discover for one doesn't like to give over your highest limit so if your highest limit is $750, Discover will match it. As far as skipping from a 524 credit score to a CSP in a year with a 2,000CL secured card, I doubt you could do that, but I think it would be safe to say that two 2,000CL secured cards would get you much further than one card with 200CL.



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