secured credit card

[kat30s]

What is the name of your state? California

In trying to re-establish my credit a couple years ago, I opened up a secured credit card account. Shortly afterwards I decided it wasn't the way for me to go, and cancelled it. I never used it, never sent in any payments. I pulled my credit reports recently, and found that it was on there, for 500 dollars plus late fees. It does state consumer cancelled account. Do I really owe for this? Even though I never made any purchases, and cancelled the account?

 

[racer72]

How much money did you send to open this secured credit card account?

 

[kat30s]

I did not send any money - they charged the 500 to the account and wanted me to make payments on that. Again though - I cancelled it right away and never used it, so I am trying to figure out if they can really make me give them 500 plus late fees for nothing.

 

[djohnson]

You will need to read your original contract with them. There are probably terms that you agreed to that the full amount would be paid and then it would become a secured credit card and you would have money in their bank. Most I have seen you pay half up front of the line they give you. But you have to pay the balance off, they will not deduct it from your deposit. Check your original terms.

 

[kat30s]

It's been about 4 years ago and I do not have the original contract, but again, I never gave them a security deposit, they opened the account and put 500 dollars on the card, and I ws to make payments. I am trying to understand if I never used the card, never made any purchases, never used any anything on the card, if they can charge me 500 dollars, for nothing. Seems to me it would be extortion.

 

[djohnson]

How you are looking at this and what your contract says is obviously two different things. You pay them in order to build your credit. Chances are you agreed to a time frame that it would be paid in and that you would keep the account open. If not there isn't much benefit to them. It's still your money and you probably would have gotten it back once you met with the terms in your contract. However now it is probably a greater amount due to collection costs.

 

[kat30s]

okay found the website for the card in question. It clearly states that if the account is cancelled, the "Reservation Fee" will be credited to the card. So therefore, it seems I have to dispute this on my credit report. I would be responsible for the late fees, but oh well, lesson learned. Sorry, I should have looked up the contract earlier. But, thanks for your input.