Secured credit card graduation

One and a half year after I graduated from Colgate University following a commencement where I sang the school’s traditional song with 3 friends in front of 7,000 people, I had yet another milestone graduation. For those of you that start your credit journey with a secured credit card, when your credit card gets converted to a non-secured card, your card is said to graduate. That’s what happened to my card.

I think the analogy here is that college is the time where you learn how to behave as an adult, while having a secured card is the period where you learn how to manage a credit card, or in a broader sense, debt. Once you pass the requirements, you graduate. From college, you get a degree. From the creditor, you get a regular credit card.

What does this mean? Once your card graduates, it leaves no traces of having ever been a secured credit card. On your credit report, the card is no longer identified as a secured card. It appears as though you’ve been managing a non-secured credit card from the beginning!

My Experian credit report from December 15th, 2012 lists the card as a secured card.

EXP Dec 12

On the January 1st, 2013 Experian report, the same card is now just a regular credit card.

EXP Jan 1

 

Several creditors including Chase do not give much credit (pun intended) to a secured credit card, so having your secured card graduate is going to give you a huge advantage in dealing with them. More importantly to some people, the money you deposited as collateral for your card gets returned to you!

Not all secured credit cards graduate. Bank of America is one of the best creditors for these cards, consistently letting them graduate after one year  of account maintenance. My card even graduated a week prior to the anniversary without my request. I received my $2,000 cash deposit back, having made more than $200 in cash back on the card. Not a bad deal.

Thank you, Bank of America, for offering such a terrific product. I am pleased to have been your customer for the last year and a half. You helped me begin my financial journey in a very meaningful way, and I’m forever grateful for that.

I liked basically everything about this card, except one thing: the fact that this card is reported to the consumer reporting agencies (CRA’s) as a secured card. There are a couple of secured cards out there that I know are reported as regular cards and therefore would give you an edge in applying for other cards. But these cards typically would not give you cash back. Cash back from a secured card is rare. Would I have paid my $200+ for the removal of the “secured credit card” label from my credit reports for one year? Probably not, but you may think otherwise.

From now on, my credit card portfolio consists of non-secured cards only, and I am ready to crack the tough nuts in the credit world, by which I mean to obtain the cards with the best benefits to me with high starting credit limits. I am very excited about the next part of my financial journey. Coincidentally or not, my secured card graduation happened right before the end of 2012. I walked into the year of 2013 with the credit cards I couldn’t dream of when I walked into the Bank of America’s branch in downtown Seattle in early 2012 to apply for my secured credit card.

This year, the year of 2013, is going to be full of excitement for me. I hope it will be a wonderful year for you too, dear readers. Happy New Year! Best of luck on your financial journey!

From Seattle,

Richard

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