Question by xlilazngrylx: Is Orchard Bank secured credit card a good idea?
I need to fix my bad credit, so I tried some pre approval forms (soft pull) and Orchard Bank preapproved me with their secured credit card.
Does this card turn into an unsecured card ?
Does it really help you raise your credit score?
Best answer:
Answer by SPIFIMAN1
Orchard is one of the cards that I used to reestablish my credit after my bankruptcy back in 2001 and yes it works very well as long as you use it correctly.
By that I mean use it for every day things like lunch, gas things you would normally pay cash for and always pay it off if full before the due date.
After about 12-months of this they should switch it to unsecured.
Good luck.
Know better? Leave your own answer in the comments!
A secured credit card does not undo your bad credit. However, it does create a positive credit history that ensures that the bad history is removed (for other reasons, such as age), you can have good credit. (If the bad history was removed and there was no good history, then you would have no credit.)
The only problem with the Orchard card is that you pay an annual fee as well as other fees. I really suggest you go with another secured cards. There are so many secured cards that you will get. You can read more about them here and there is also three she points out that do not have an annual fee and I think 1 of them is 0% interest.
http://www.comebackcredit.com/what-is-a-secured-credit-card/
You need to understand that most of the secured cards do convert to unsecured within 9-12 months if you pay it on time each month. So you really want to get a card that does not have the annual fee or you will be facing closing it down the road which is not good for your score.
They will, definitely, raise your score as long as you handle them well. If you can open 2, that is even better.
Yes, Orchard offers a good secured card and it is easy to get approved. They report to the three major credit bureaus, so with responsible use it will definitely help your credit score over time. (I would advise making small purchases and paying in full each month.)
The card CAN be unsecured at the discretion of HSBC (the issuer of Orchard cards). However, some people have had a hard time getting them to do so even after their credit scores have improved considerably. I personally had the card when I was building my credit and they did unsecure it after about 18 months. I wouldn’t worry too much about that though, because once you have improved your credit you will be eligible for a better card anyway. Of course how long that takes depends greatly on other factors in your credit report. (Once you have repaired your credit it’s really a “sock drawer card” anyways no matter what they do to it.)
If you are still shopping around, then Citibank has a great secured card. They actually put your deposit into an 18-month CD instead of a savings account which allows you to earn more interest over the period of time the card is secured. They are supposed to unsecure the card at the end of the 18 month period IF you have been responsible. The Citibank card might be a little harder to get, so if you have a BK you may not qualify.
FYI – the 0% card mentioned in one of the other answers has a monthly fee. BE CAREFUL when applying for credit cards in general and always read the terms and conditions carefully!