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Scott: Today, we’re going to talk about secured credit cards and why they’re important. They’re really important for, if you’d had some struggles in the past, you’ve had some mishaps and mishaps in credit, so most people do want to pay their bills on time. However with the loss of job or reduction of income, sometime our credit may have suffered a little bit and it’s tough to get back on that wagon. So what works best is actually to establish a secure credit card. Now that simply is instead of the bank giving you a line of credit where credit card on a sheer promise to pay, you actually give them some of your hard earned cash. It could be $300 or $500 and what they … I’m talking here.
Alex: What?
Scott: Do you mind?
Alex: What’s the problem?
Scott: You’re smacking your gum. As I was saying, a secured credit card is a great tool to re-establish credit what happens recent applied for a secured credit card, what you simply do is you’re giving a bank or a credit card issuer anywhere from $300, $500, possibly a thousand dollars. Depending on what the credit card company requires.
Alex: How bad you fucked up.
Scott: Yeah. They will then issue a credit card which you can use as a regular credit card and make your purchase of goods and services in your area that are online. As time goes by and you continue to pay those cards, you pay the card every month, it starts to rebuild a payment history and the creditors report to the bureaus. You have a situation where you’re showing that you have good faith and you have good payment history once again. As time goes on and you start to build that trust many creditors will do one of two things. They would either increase your credit line without asking for any additional money or they will actually return your money and it now becomes an owned secured credit card.
Couple things to learn about credit cards, number one, when looking for a secured credit card you definitely want to pay attention to the fine print. Because all secured credit cards, or almost all will charge at least an annual fee or setup fee of some sort, and while they are regulating you do want to pay attention shop around of what, what this are. Number two, you definitely want to pay attention to make sure that they each report to the three credit bureaus because after all you’ve taken a secured credit card as a strategy to reestablish your payment history for a good credit history. If the secured credit card is not reporting to the credit bureaus then it’s a secret, nobody knows that you’re reestablishing credit and that’s very key point.
Number three, when you receive the card what you want to do is you want to charge everything on that card that you typically will pay cash for. Your groceries, your gas, your coffee, anything that you do.
Alex: It’s wonderful.
Scott: When the bill comes the other month very important to pay the whole thing off but what that does is that shows you’re charging, you’re running up a balance, you’re paying the balance off, you’re running up a balance, you’re paying the balance off. If you do that the course of the next four or six months, number one you can then appeal back to that creditor to either ask for your money, your deposit to be returned, thereby making an unsecured credit card. Or …
Alex: Not bored at all.
Scott: They may indeed review your account and give you a credit line increase without and increase deposit. Either way it’s a win for you. Moving forward if you want to apply for another card ..
Alex: Do you like cheese?
Scott: Yes I do.
Alex: Cheese is good.
Scott: Very good in moderation.
Alex: Yeah, you don’t want those cottage cheese legs.
Scott: No.
Alex: Disgusting.
Scott: No. Have cheese and wine with you.
Alex: Keep your cholesterol and your debt low, and your mortgage, and then you’re good. Continue.
Scott: Well thank you.
Alex: So pay it all off.
Scott: Pay it all off.
Alex: All your groceries, all your … I’m sorry, did I stressed you out?
Scott: With that moving forward as you develop a history with that card, so always going to try may apply for another one just two or three times. As you get another card start using that card with it.
Alex: Have lots of cards?
Scott: Well maybe three but do a little …
Alex: Really?
Scott: Yeah.
Alex: Typically you advice you will have three cards?
Scott: Yeah, well if you’re rebuilding a credit the more lines of credit that you have the more trade lines you have.
Alex: The better.
Scott: The better because you want to have some depth, you want to show that you can handle money.
Alex: Yeah, you’re like the good old my money, bling bling America.
Scott: Yeah, something like that. Well bling bling America’s fine, they will say bling bling your paying them.
Alex: Right, right.
Scott: We’ll say that’s what’s important.
Alex: Got you.
Scott: You know the old saying goes, if you can prove to the bank you don’t need any money that’s when they want to give it to you.
Alex: I have an old saying.
Scott: You do?
Alex: One time a lollipop, two times a sucker, three times you end up in a old crack house with nacho cheese all over your naked trembling body. Heard of that one?
Scott: That sounds like a personal horror story actually. Moving on.
Alex: Moving on.
Scott: Moving on. The strategy is when you have that one card use it for a few months, charge it up, pay it off, charge it up, pay it off. From there apply for a second card, from a different institution and once you receive that card, charge it up, pay it off. Stop using the first one, start using the second one.
Alex: No crying in credit scores bitches.
Scott: Yes.
Alex: Stop crying.
Scott: Do that couple times, different but two or three cards and then you’ll have had, now you got three new trade lines of established credit.
Alex: Yeah.
Scott: Now, when you’re looking for your bigger purchases, if you’re in a position where you need to buy a car, or a in a position to buy a house you’ll have some credit reestablished to help.
Alex: To do that, yeah.
Scott: Yeah, absolutely.
Alex: Great.
Scott: All right, well that’s it for today.
Alex: I love this shirt, is it shark skin?
Scott: Shark skin, no.
Alex: You’re a man in the ocean.
Scott: I’m a land lover actually.
Alex: Do the ocean scares you?
Scott: No it doesn’t, no it doesn’t scare me.
Alex: That was a cat, cats under the ocean.
Scott: Catfish.
Alex: That was a … oh yeah catfish, and that’s a wrap.
Scott: I guess we’re done so for DCC and financial community I’m Scott Tennell.
Alex: I’m Alexander Keshon and I make candles out of my …
