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Secured credit without rip-offs


Do yourself a favor. If you've had bad credit in the past and are seeking a secured credit card to help you start a new track record, don't pay anyone $50 to $100 to help you find such a card.

The banks listed below all offer secured credit cards, each with a credit limit equal to the deposit a consumer makes into an interest-bearing bank account.

Too often, secured credit cards have been blatant rip-offs by companies that prey on folks worried about their credit. The current economy, with many folks losing credit or declaring bankruptcy, has brought out more vultures. Sometimes you're asked to pay a hefty amount of money and you end up with just a list like the one here. In other cases, the cards are good only for purchases from a catalog of overpriced merchandise.

"There's so much fraud because secured credit cards are for people who have had past problems," said Mary Beth Butler, educational associate with the non-profit BankCard Holders of America in Herndon, Va. "I can't think of a way to rebuild credit without putting money down for such a card."

MasterCard and Visa have been cracking down on fraud. MasterCard will no longer permit the use of 900 telephone numbers to promote secured cards. In addition, any mail or telephone solicitation for a secured MasterCard or Visa must now give the name of the affiliated bank that is actually issuing the card.

It's important to be sure that the bank accepting your deposit is insured by the Federal Deposit Insurance Corp.

Don't expect low finance charges, for these cards aren't aimed at privileged customers. However, do shop around, checking the interest paid on deposits, the fees and the requirements in regard to your past credit record.

Among banks offering secured Visa or MasterCard credit cards to consumers with previous bad credit but no current delinquencies, according to BankCard Holders of America, are:

* American Pacific Bank, P.O. Box 19360, Portland, Ore. 97280; $400 minimum deposit required.

* Central National Bank, Broadway and Charleston at 14th, Mattoon, Ill. 61938; $500 minimum deposit for Illinois residents and $1,000 for out-of-staters.

* Community Bank, 19590 E. Main Street, Parker, Colo. 80134; $400 minimum deposit.

* Consumer Fresh Start Association, 217 N. Church St., Princeton, Ill. 61356; $400 minimum deposit.

* Dreyfus Thrift and Commerce Phase One MasterCard, P.O. Box 6003, Garden City, N.Y. 11530; $500 minimum deposit.

* First Interstate Bank of South Dakota, N.A., offered by (1) United National, P.O. Box 5063, Sioux Falls, S.D. 57101; or (2) Centennial Bancard, 2001 Butterfield Road, Downers Grove, Ill. 60515; $250 minimum deposit.

* First National Bank in Brookings, P.O. Box 784, Brookings, S.D. 57006; $400 minimum deposit.

* First State Bank, P.O. Box 15414, Wilmington, Del. 19850; $375 minimum deposit.

* Key Federal Savings Bank, P.O. Box 6057, Havre de Grace, Md. 21078; $400 minimum deposit.

Pioneer Federal Savings Bank, P.O. Box M, Lynwood, Wash. 98046; $1,000 minimum deposit.

* Service One/Bank of Hoven, 26660 Agoura Road, Calabasas, Calif. 91302; $380 minimum deposit.

* Signet Bank, P.O. Box 85547, Richmond, Va. 23285; $300 minimum deposit.

* Texas Bank, N.A., 1845 Precinct Line Road, Hurst, Texas 76054; $555 minimum deposit.

* United Savings Bank, 711 Van Ness Ave., San Francisco, Calif. 94102; $1,000 minimum deposit.

All but the final two banks offer a credit line of 100 percent of the deposit. Texas Bank offers 90 percent of deposit; United Savings Bank 50 percent.

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