Know When to Hold 'em;
Secured Credit Cards Can be a Valuable
Tool But Check The Fine Print
by Maryanna Lewyckyj

The way I see it, credit card issuer Capital One may think some folks are just dying to get a MasterCard.

That's one explanation why a "guaranteed approval" MasterCard application was sent to my father, who passed away Feb. 3, 2004.

The more prosaic reason, of course, is simply an out-of-date mailing list. The fact the application was sent to an address my father hadn't lived at since 2002 attests to that. But I was intrigued how Capital One could extend "guaranteed approval" to a dead man.

As with many things in the consumer world, the asterisk after the word "guaranteed" leads into a fine-print jungle.

Turns out that applicants who don't qualify for a regular MasterCard are eligible for a secured credit card.

That's a no-risk proposition for Capital One, since applicants would have to pony up security funds for Capital One to use as collateral if the card payments are in default.

Because banks have traditionally been reluctant to issue credit cards to people with tarnished credit or no credit, secured credit cards can be a valuable tool to some.

'SHOP AROUND'

While the selection is small, the variations in fees among different providers can be huge. For example, consumers could pay no annual fee or as much as $120 a year.

She suspects Capital One's "guaranteed approval" blitz is designed to appeal to consumers struggling with post-holiday debt.

"It's no surprise," Campbell said. "It's smart marketing on their part."

The "guaranteed approval" may appeal to people who've been denied credit cards by the big banks.

NEWER PLAYERS

Consumers who apply for a string of credit cards, hoping to ease holiday debt, could actually lower their credit score, making it harder to get credit.

If a relative has died, you might want to notify Equifax and TransUnion to prevent fraudulent data use.

Although I hand-delivered my father's social insurance number card to the government within a month of his death, SIN cancellations aren't forwarded to credit bureaus.

"The government doesn't talk to the credit bureaus at all," said Ken Porter of TransUnion.

Once notified of my father's death, Capital One apologized and offered condolences.

As for the application "guarantee," a spokesman said, "a number of checks" are conducted before any account is opened.

Copyright 2005 Sun Media Corporation

Sun Media Corporation, The Ottawa Sun, February 27, 2005,
BYLINE: MARYANNA LEWYCKYJ, OTTAWA SUN

Back to RepairCreditAmerica.com opening

© Copyright 2008 All Rights Reserved
This site is maintained and hosted by Alliance Internet Marketing
This site is best viewed with Internet Explorer or Netscape versions 4.0 or higher