Tomo card - no credit check, no annual fee

[nozar]

I'm surprised the Tomo card hasn't been discussed here yet (or at least, doesn't show up in search results).

1. Thoughts on it?

2. Any downsides to applying for this card and then filing Chapter 7, assuming the bill will always be paid in full and on time?

3. Generally, what happens to secured credit cards, that have been paid in full, when filing? Asking because I'm not sure I'll want to file for Chapter 7, (vs. paying back my loans) so I'd like to start rebuilding my credit ASAP in case I end up not filing (this depends on a number of factors that will become clear in ~6 months, and I don't want to waste those 6 months).

Thanks!

[Barbisi]

I wonder if this could help some one finishing up a five year BK13 re-establish beginning credit before the two year wait for the bankruptcy filing to be expunged from the debtor's financial records?
What do you guys justbroke and shipo think? Too good to be true?

[justbroke]

No thoughts on it.

It is likely that the card will be cancelled automatically within 3-5 business days of filing.

Secured credit cards have no special protection in bankruptcy. Just about any serious bank will subscribe to electronic bankruptcy notifications through the BNC and would see the bankruptcy. There are very very few cards which survive that scalpel. I had a secured card through Wells Fargo and it was closed even though I didn't list them as a creditor (because the balance was $0). The simple fact is that most financial services companies subscribe to notifications either directly through the BNC or through a subscription from one (or more) of the credit agencies.

No one should ever plan or expect that any credit account will survive the bankruptcy. It does happen. I had a Jared card with a huge credit line survive. But when I poked the bear, they summarily closed it.

[justbroke]

Now, obtaining a secured card while you are already in a Chapter 13 (or already filed) is probably the better idea. I had to do this to travel for business and it worked perfectly fine. I have a $5K secured VISA that I obtained shortly after filing because I needed it for work.

[Zombie13]

ok so secured credit cards... generally speaking, do we deposit the same amount of money? hm...
Does a $5k secured credit card always require a $5k deposit, a $500 card require a $500 deposit, etc. ? Like a prepaid debit card? Or, can they require a lower deposit... ie would a $5k card require a $2500 (50%) deposit?
Just wanting to understand, thanks justbroke, and all!

[justbroke]

The requirements of a secured card depends on an issuer. Usually it's $1 of deposit is equal to $1 of credit limit. Some creditors will do 90% of the deposit account (rare, but they are out there), and some will give you more than your deposit (I think Capitol One has this type of deal available, but may not be offered).

Personally, I'd start with a $500 card and make sure that the issuer has a relatively simple way to increase the limit. I used FNBO which has an easy process. I also had a Wells Fargo (which was closed on filing), which was difficult to increase (and difficult to obtain).

[despritfreya]

Zombie 13 referenced the use of pre paid debit cards - I’m sorry folks but I have to ask this. Why would anyone use a pre paid debit card? Aren’t there major fees for such use, either a monthly fee or a per transaction fee or a load-up fee? Just like paying interest on a credit card, these fees are unnecessary and simply line the pockets of big corporations.

I never understood how consumers get into the use of pre paid credit/debit/gift cards that have these fees. Since loading up such cards means you have cash to accomplish the task, why not save by using the cash? (This, of course, excludes gift cards actually intended as gifts.)

Just an observation.

Des.

[shipo]

Regarding secured credit cards; after my discharge last year I applied for two, the first was from CapOne and I hated it. Why? The maximum limit is $1,000, annoying in and of itself, but workable (or so I thought) because I could make multiple payments per month. Nope; multiple payments triggered an Anti-Money-Laundering (AML) protocol and they would hold roughly every other payment for up to 12 days. Then I found out CapOne often takes years to unsecure their cards, some times many years; yeah, I closed that card after less than 7 weeks.

My second secured card was night and day different and infinitely better; it was a high(ish) limit card which allowed up to a $5,000 security deposit (in an interest bearing account) in exchange for a $5,000 credit limit. Not only did this card pay a flat 1% cash reward, but it graduated at exactly the 6-month mark to an unsecured card with a 3-tier rewards structure, still with the same credit limit, but also to a Visa Signature card with all of the extra benefits the "Signature" label provides.

One further comment on the higher limit secured cards, based upon my experience as well as the anecdotal experiences of others I've talked with, having a high limit card on your credit report definitely helps when it comes time to apply for other unsecured cards versus having a card with a $500 or $1,000 credit limit.

[Zombie13]

Thank you despritfreya . And very good point - yes, prepaid debit cards do not make sense. Once or twice I have purchased one as a gift and man... there's a big charge right off the bat... 20% or so - for example, a $25 prepaid debit card costs $30 plus tax.
Thanks!

[bcohen]

I never understood how consumers get into the use of pre paid credit/debit/gift cards that have these fees. Since loading up such cards means you have cash to accomplish the task, why not save by using the cash? (This, of course, excludes gift cards actually intended as gifts.)

I don't use these type of cards, and never have, however they do offer some level of utility to people without a bank account who need the ability to shop online or use pay-at-the-pump for fuel. Other than that, you are right--it's a waste of money.

[nozar]

OK, so secured credit cards get cancelled because banks subscribe to electronic bankruptcy notifications through the BNC and would see the bankruptcy

There are very very few cards which survive that scalpel.

Probably debit cards, e.g. those issued by crypto platforms like Coinbase, or those associated with brokerage accounts like the TD Ameritrade debit card.

[justbroke]

Debit cards would survive regardless of the type of bank, unless you were to discharge debt from that bank and it's tied to the debit card (e.g. overdrafts on a checking account).