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A blogger and contributor here recommended Digital Federal Credit Union (DCU) as a possible lender in my search for cash secured credit cards to establish my credit history, and I got approved for one today.

It means this would be one of my first credit cards.

https://www.dcu.org/prodserv/ccards/visa-secured.html

However, in my search for reviews of the DCU, I found a lot of negative feedback about them:

  • closing people's credit cards, who have been members in good standing for 20+ years
  • sending to collections payments due only by 7 cents without contacting the member at all
  • charging members account inactivity fees without notifying them in advance

Here are some excerpts from various sites (they can be "googled up" for the source links)

  • The general perception about Savings Account is the money will grow and does not require any activity. But for the checking account it will require some activity like direct deposit and things like that. I had a savings account with DCU. The money I deposited there became half the money after two years. When I called the customer care lady, she said, since the account did not have any activity, they did this and they cannot reverse the fee. I am a poor man. I had a different perception about Credit Union Earlier. I logged in yesterday to find they had been charging me $5/mo for the past several months because my account has been "inactive".

  • Very difficult to work with regarding fees, whether or not you were at fault. Warning: Hope that you never have a problem with your account, because if you do you'll wish that you'd gone else where.

  • Wrecked my credit for 7 cents!

My question is:

can DCU, or any lender, be held accountable for trashing your score? (specially, when they are one of your oldest credit lines)

For example, can't I request/make them change a card to secured from secured instead of them closing my card altogether and destroying my history with them?

Of course, suing them is the last option, but these things happen in the worst of times when you might not have resources to hire an attorney.

I am proactively taking steps, that I think will hedge the possible risk with them by opening a cash secured credit card account with SchoolsFirst CU at the same time (so that both have the same age and credit limit):

http://www.schoolsfirstfcu.org/creditcards/sharesecuredvisa.asp

SchoolsFirst does not pull your credit any time, so I guess my applying with them would not many any negative impact on my credit.

  • I would appreciate some feedback, good or bad, about experiences with Digital Federal Credit Union. – f1StudentInUS Sep 21 '11 at 19:46
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You'll find similar reviews for all the credit card issues, the question is whether they actually represent the reality, or are exceptions that happened to people but are not based on some policy or rule, but rather go against it.

Generally speaking, bad reviews should be a red flag. If you're considering getting a service or a product, and the reviews on it are consistently not favorable - think again. You have a high chance of getting burned.

Since you already have a secured card from WF, I see no real reason for you to rush to DCU and get another one. If these are the reviews and experiences people are having, I would avoid going there.

can DCU, or any lender, be held accountable for trashing your score? (specially, when they are one of your oldest credit lines)

Sending to collection a debt of $0.07 may be ridiculous but it's their right. It's not "trashing" your score, if you really owe the money.

For example, can't I request/make them change a card to secured from secured instead of them closing my card altogether and destroying my history with them?

You can't make them, you can ask them, and they can refuse.

Of course, suing them is the last option, but these things happen in the worst of times when you might not have resources to hire an attorney.

Suing for what? I checked the "Wrecked my credit" link... Pay-off statements have expiration dates, if he paid off prior to that date - there shouldn't be any $0.07 left, and he should have sued or otherwise make them fix the problem as it is their fault. If he paid after the expiration date - it's his fault. Plain and simple. My guess in this case would be that he paid after the expiration date (one day late would make the $0.07 difference).

Of course the overall service experience (they didn't send him the bill, didn't want to solve the matter reasonably, caused a lot of damage to the customer which costs more to fix to them then the debt itself, etc etc) again should make you reconsider joining this CU.

And of course, the usual question: what are you trying to achieve? You seem to be working overtime on these secured cards, even though you already have one (or more?). What for? It really won't make any difference to your credit report, so why all these actions? As an observer, looking at you describing your actions and considerations, it totally doesn't make any sense at all to me.

  • Value your opinion highly. Thanks for these indepth answers. Why I want a card with a CU: they have no annual fee. WF has a $18 fee and will continue charging it unless they decide to make the card unsecured. If they don't change me over to a unsecured card next year, I am closing the card, effectively destroying that history. Keeping that possibility in mind, I wanna have at least one more secured card with no fee that would not hurt me to keep open. DCU, but for their bad reviews, seems like a good option, just as SchoolsFirst does. However, DCU has much more features than SchoolsFirst. – f1StudentInUS Sep 19 '11 at 21:11
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    @f1StudentInUs: Chances for WF not to convert it to a regular card are slim and depend on your payments activity. The history of no longer than a year that will be "destroyed" is meaningless, more or less. I think you're too hysterical over this. – littleadv Sep 19 '11 at 21:31
  • If I open up 3 credit cards this month and one of them or even two of them gets closed a year down the line, will it impact my score in the same way than if I just had a single credit card that got closed a year down the line? – f1StudentInUS Sep 20 '11 at 3:51
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    closed accounts don't impact the credit score (if they were closed in good standing), so the answer is YES, it will NOT affect all the same. What affects is the length history of your credit. Unless you intend to get a mortgage in the next 2-3 years, you really shouldn't be worrying about it. Even if an account is closed, it stays on your report for 7 years, by that time you're sure to open new accounts. – littleadv Sep 20 '11 at 4:11
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Do not assume that just because a creditor does not pull your credit score first that means it will never affect your credit. That is simply not true.

If you are looking for a secured visa then you do not really have much credit to begin with probably. The impact that pulling your report has is temporary. Where you run into problems is when you have a large number of accounts open up at one time increasing your available credit. If you have several requests but only open one or two accounts you are not having any real impact on your credit score long term.

Where you want to avoid alot of activity on your credit report is right before you secure finiacing for a big purchase like a house or car. Or if you are trying to open up an unsecured line of credit. Even here they really only care about your recent activity(6months-year) as far as inquiries and new credit lines.

About this bank... I would be wary of a bank with that kind of feedback. There are enough good banks around that you do not need to mess with them or a bank like Chase that does similar things with their fees.

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None of these problems will affect you if you do one simple thing: pay your bill on time, every month.

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