Complaint Review: Plains Commerce Bank - Sioux Falls South Dakota

If you have bad credit or no credit, it is almost essential to get a credit card or two to improve it. Banks want to see that you can be trusted to use them responsibly-- stay under the limit and make payments on time. This a catch-22 situation. The products offered to people with low credit scores are limited and of course not as good a deal so the "prime" ones. The high-fee "unsecured" cards out there are a very bad deal. You have to pay money up front before you can use any credit, like a secured account would be, but you'll never get that money back. A security deposit remains your money (you just can't have it) as long as you keep the card in good standing. If you close out the account or if the bank decides your credit has improved, you will get the money back. Remember that the purpose of this exercise is NOT to buy a bunch of stuff on credit, it is to establish a good credit rating so *later* you can get reasonable terms when buying stuff on credit. Save up about $250.00 in the bank and go looking for good secured card deals. If you can't save up $250.00, you *will* get into trouble with *any* credit card. Avoid cards that have a bad reputation or charge high monthly/annual fees. A high annual fee will become more and more of a problem because you'll want to keep this card for perhaps several years. Old accounts help your score more than new ones do. It's also good to have the account appear on your credit report as if it were unsecured, some companies do that. The APR is a primary feature in credit card promotions, but it is really a distant secondary concern to you here. In many cases, APR based finance charges can be avoided altogether by paying the full balance every month. Even if they do apply, a 20% APR on a $300 balance is only $5.00 per month (and a 10% APR will only save you $2.50). True, $5.00 per month does add up to serious money over time, but this is the worst case, if you keep the balance at $300 all the time. Then use your card sparingly, but always some every month. Buy only things that you would have had money to buy anyway without the card. Make all payments as soon as possible. Try to pay the minimum payment as soon as you get the bill, then send another payment that will actually make a dent in the balance, when you have it. Companies that intentionally delay payments are not your friend obviously. If you don't get a bill, send money anyway! There are companies that do that on purpose too. Get away from such companies as soon as possible. Keep well under the credit limit so as to not incur an over-limit fee. If you have limited income, this leads to a runaway situation where late and overlimit fees are charged every month, and you'll never be able to pay it off. Eventually the balance reaches two or three times the credit limit. The security deposit is not enough to pay it off, so you'll have bill collectors calling all the time, in addition to renewed bad credit. Beware the tender trap that credit is.