<p>I have a question about credit, and I have thus far not been able to put it to words eloquently enough to get an answer from google. I have in the past gotten good credit advice from this forum so I thought I’d try again.</p>
<p>I applied for a secured credit card (with BOA) with the intention of using it for my usual monthly expenses. I am not currently employed (unpaid internship), so I pay for my monthly expenses out of savings-- I have more than enough in savings to do this and I keep an extremely strict budget. My intention was to put some of those usual expenses on the card and then pay it off every month out of savings like I would be doing anyway, thus beginning to establish credit. I had no intention of carrying a balance or spending any more than I would be spending anyway, I know better than to think I can afford to live that kind of lifestyle, and I am accustomed to paying bills in a timely fashion. I did not want the card to run wild with it, I just wanted to establish credit.</p>
<p>I am 21 years old, so the law about cosigners for under 21s doesnt apply to me, and the bank said that given all that I should be able to apply for the secured card with no cosigner (a regular card I would have needed one for regardless of my age given my lack of credit history.) My parents approved of the idea and when I was at the bank doing the application, and the employee I was working with did not see a problem with my arrangement. I was prepared to put down a $300 deposit for the card, which the banker also said was all fine.</p>
<p>It seems that it was expected that I would put my parents household income on the application since I am theoretically financially dependent on my parents. They assured me my parents names didn’t have to go on anything, they were not signing for anything, and that it really had nothing to do with them-- I just had to supply the number. My parents now do not want me to go through with the application because they are convinced that 1.) they will be on the hook for any debt I fail to pay off as though they cosigned, and 2.) that this will somehow take away from their access to credit. </p>
<p>Is any of that true? Why do they need to know my parents income if I am solely responsible for the debt? Am I missing something here?</p>
<p>Use [Credit</a> Union Locator](<a href=“http://www.creditunion.coop/cu_locator/quickfind.php]Credit”>http://www.creditunion.coop/cu_locator/quickfind.php) to find a credit union that you can join. Sit down with one of the member service agents, and discuss your situation. Find out if they can help you. If you are in such a remote location that there are no credit unions, find a small, local bank. The service is much more likely to be human. I can’t think of any good reason why you would want to use BOA as your primary bank.</p>
<p>If you have enough money in your current bank account to pay your expenses, you don’t need a credit card. If you want convenience, pay with your debit card.</p>
<p>You wouldn’t get a card with a very high limit, so little risk for your parents anyway–if they worry that by giving their annual income they might somehow be held responsible for your debt. (Is there a reason why–like any past irresponsibility with $ on your part–that they’d be worried about this?) I think they want this info. (parents’ income)
because many 21yos who are still in college/unemployed or somehow financially dependent on their parents will have their credit cards paid by their parents. It helps get you approved. It doesn’t mean they will be obliged to pay. (But in most cases, parents will pay).</p>
<p>If your parents refuse to give the info. I would just try other banks/credit unions. If you have significant savings, it seems they’d look at that and give you a low-limit card. OTOH, maybe you should wait until you are employed to get the credit card–just use a debit card until then.</p>
<p>The BOA secured credit card is a really bad card option. It’s secured, so that means you have to put money down up front in order to use it. They charge you a $39 annual fee, which means you are paying 10% of your credit limit in annual fees each year! You can do a lot better than that.</p>
<p>If you truly have no credit, you can do a Google search for student credit card. Tons of card options will appear and you can do one of those.</p>
<p>If you have bad credit, I’d try to find a free way to rebuild your credit rather than through secured credit cards.</p>
<p>Emaheevul - If your parents are concerned with their income being made public, you could always write in their net income or some equally spurious value. But there are other issues with BOA secured cards. My D had one. After awhile BOA began charging an “Inactivity Fee” on the security. Since we couldn’t withdraw the money without surrendering the card, the only options were to pay the fee … or periodically add money to the secured account (and I don’t know if the latter was even possible, since we elected to surrender the card).</p>
<p>There is nothing in my history for my parents to worry about, I have had monthly bills to pay for a year now that I have paid on time every time with no reminders and I’ve never had to ask for money to pay bills. I have had a checking account for three years and have never overdrawn. I am very frugal. I did all my loan documents myself when I started school and all that has gone without a hitch. My parents just hate credit and want nothing to do with it (for the longest time my mother was “not allowed” to even have a store charge card per my father), and they are concerned about limiting their access to credit if they cosign a credit card for me-- although I’m not entirely sure that’s what BOA is asking them to do, since they literally don’t even have to sign anything. I probably have nothing on my credit report but the fact that I have a student loan out, which is in deferment except for interest that is being paid by my parents every month. There has never been a late payment on that or anything else that I have been responsible for, and that loan is about a year old now.</p>
<p>I looked into other cards but I didn’t know enough about them and was skeptical of someone who would approve me for a real card if I really don’t have any credit, but approving me based on my parents income when they aren’t responsible for the card seems sketchy, too. I am perfectly able to just keep paying all my expenses with checks and my debit card like I do now, but since I am graduating this Spring and voyaging further into adulthood it seemed prudent to start establishing credit if I could at no great inconvenience.</p>
<p>ETA: That is interesting, Newhope. When I call to deal with this I will have to ask about that.</p>
<p>Like an earlier poster said go to a credit union, you’ll get the most straight forward treatment and the best deal. Is there some reason why you want a credit card rather than a debit card? In any case it has been years since I have had a credit card with a yearly fee and I have never had one where I had to put money up front.</p>
<p>Your parents are just nervous about being affiliated with your card, they don’t want to be responsible for any of the debt. I know they wouldn’t be but they are just nervous. You should be able to get a card without having to put any of their information on the application.</p>
<p>As someone who has worked in the credit card and mortgage industry, it seems to me that it is fraudulent for the bank to have you put down your parents’ income when they are not on the actual card with you. If they specifically gift you money in a year, then you can count that as income in the last year. But you can’t just put down their income as your own, even if you are still dependent on them.</p>
<p>What about the bank where you have your checking/savings accounts?
It seems they would be able to offer you a low limit card. You shouldn’t have to pay a fee.</p>
<p>Does this really work? My son applied for a Discover student card. He listed his measly summer job as his income and turned in several “proof of college student” forms. Then we get back “you have been rejected for lack of adequate income”…well duh…so he called and they sent a form for me to co-sign, but we took too long getting it back (5 days) so they cancelled his application.</p>
<p>He started over and we are hoping this one goes through, but meanwhile I got him a card on my account to use. That one came in 2 days.</p>
<p>I’m operating on the theory (tho my communication with Discover customer support was confusing) that the one in his name (with my co-sign) will build him a credit history where having a card on my account will not… we’ll see…if it doesn’t go through this time we’re giving up. I just wanted him to have a card to buy books/gas (mom reimbursable items) versus stuff he uses his debit card to buy.</p>
<p>It costs nothing to try and won’t hurt. The worst that happens is they say no.</p>
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<p>Well, in your S’s case for Discover, it didn’t. But there are a ton of cards out there.</p>
<p>When I was a college student with little income (summer jobs), I was promptly approved by MBNA for a $5000 line of credit and then later approved by CitBank and Providian. It’s been a few years and the rules for credit are always changing.</p>
<p>You can also try Wachovia. I was not able to locate the information online, but with a student account I believe you can get a credit card with a low credit limit.</p>
<p>“I have had monthly bills to pay for a year now that I have paid on time every time”</p>
<p>What kind of bills were these? Phone or utility bills in your name? Rent paid to an apartment complex? If so, this is the beginning of a credit record for you. You can order your credit report once a year for free from each of the credit agencies. Read about it at [Your</a> Access to Free Credit Reports](<a href=“http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm]Your”>Free Credit Reports | Consumer Advice) then order one (or more) and see what information is in the system for you.</p>
<p>My 19 year old daughter recently was approved for a Discover Card, after being turned down for a Citicard. She was able to claim about $4000 combined income from her work study job and her summer job. The credit card companies are definitely a lot tighter granting credit than they were a few years ago.</p>