Will I be able to get a higher limit than my security deposit?

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
2 posts
xdunlapx
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Location: Ohio

Will I be able to get a higher limit than my security deposit?

Postby xdunlapx » Sat Aug 25, 2012 7:49 pm

Hi guys, I'm new here. I have bad credit thanks to several factors, one is my mental health (bipolar disorder among others) and poor decision making as a young adult. I got my first credit card in 2002 with a limit of $800 which was quickly raised to $1000. But due to my mental illnesses I quickly ran that credit card up to the max and eventually it went to collections when I lost my job due to my illness and I haven't been able to work since. So it's stayed in collections and the account is now $1500+.

But I now live with my parents who support me financially and I am going to college online to hopefully some day be able to work for a living and have a marketable skill (software engineering, programming)...

I just applied for and was approved for the Capital One Secured Mastercard. The minimum deposit required to open the account is $99 and I paid $125. Since I don't have my card yet, I hope to get it next week, I don't know much else about the card other than it's a $29 annual fee with 22.9% APR. Is this a good card to help rebuild my credit? I did apply for credit not long ago and I got a denial letter stating my credit score. I think it was the Experian score which was about 550. Much higher than I ever dreamed it would be, so I'm happy about that, though I know that score is awful... But at least it's not 300!

So I'd like to know if my credit limit will be only what I paid into the card which was $125 or do they give you a higher limit than that but require a minimum payment such as the $99?

It wont break my heart if the credit limit is only $125 but I'd like it to be higher so that I am able to have a better ratio of debt to credit limit. I plan on using this card a few times a month for stuff that we would buy cash anyway and pay it off each month. Is this a good way to go to help rebuild my credit? I did hear that Capital One generally increases the credit limit about 3 months into you having the card if you pay on time each month. Credit.com rates that card 4 out of 5 stars. So I hope I made a good choice with this card.

If you have anything to say about Capital One or their secured cards, please let me know. This is a new adventure for me, I'd like to know as much as I can about the company and that card. Thanks!!

Brittany
Capital One Secured Mastercard (9/2012) $226 limit


shoptalk01
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Postby shoptalk01 » Tue Aug 28, 2012 2:31 pm

Capital One starts you off with a credit line of $200, so for your $99 you get a credit limit of $200, so for $125 you should get $226. If you always pay on time, don't go over your limit and such, Capital One has been known to give small increases to the credit limit without requiring additional deposits.

Capital One is a major well known and respected bank and they will report on your credit. Capital One has been known to approve people when other banks won't and the only downside is they don't have any products to grow with. From what I've seen, I don't think there is such a thing as a good deal on a secured card but I would say starting off with a $200 credit line for $99 down is a good deal. I don't think anyone else does that.

With a $200 credit limit, I wouldn't charge more than maybe $65. Your credit score doesn't care what your limit is, just how much of your available credit you are using. Maybe the best thing about Capital One, they don't report the account as "secured" so it looks to other lenders like you have a regular line of credit. So if Capital One starts you off with $226 then gives you a $100 increase and you add $500 of your own money, it will look like you have an unsecured line of $826.

The good news is you don't have to charge everything you buy to build credit, in fact for some of us, it's bad advice. Instead, use it at Burger King to buy a whooper then put the card away. Be sure to pay the bill on time. Your card was activated and used once, now it's going to report as an open account in good standing, in theory charging $10 every 3 months or so will do the same for your credit as charging $50 every month.



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