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SECURED CREDIT CARD DOESN’T REQUIRE POOR CREDIT

By Bruce Williams 4 min read

DEAR BRUCE: Does a person have to have bad credit to get a secured credit card? — Avid Reader

DEAR AVID READER: It is absolutely not a requisite that you have bad credit to get a secured credit card. But if you don’t have bad credit, then I don’t see any reason to get a secured card. It’s generally going to cost you more than the card issued to a person with good credit, and I see no advantage to you.

As long as an individual has good credit, the best deals will be available to him/her. For people with poor credit or no credit, the secured card is a good way to get back on track for a traditional card.

DEAR BRUCE: I heard from a friend that you have to be in the military to open an account at a credit union. Is this true? — J.C.

DEAR J.C.: I think what you have confused is that if you have a credit union established, for example, for members of the Air Force, then you must meet that qualification in order to become a member of that credit union. But a credit union can be established for other affinity groups, say, for people who share a specific occupation, such as accountants. There is absolutely no reason for military preference unless the credit union has been established to benefit military members and perhaps former military members.

DEAR BRUCE: How come mortgage companies can trade your mortgage to other companies? — R.T.

DEAR R.T.: The answer is simple. The mortgage obligation that is owed to a mortgage company may be traded as long as someone else is willing to purchase it. Whether it’s a profit or loss has absolutely no bearing. If the two parties — the buyer and the seller — come to an agreement, it can be bought and sold.

I can understand how you might be a little uncomfortable having someone other than the people you chose holding your mortgage, but uncomfortable or not, it’s a perfectly proper proposition. There is no reason for you to worry. The second holder is bound by all of the terms in the original mortgage.

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.

DEAR BRUCE: I have a question about putting rental properties in an LLC. I own three rental properties in Las Vegas; one has $150,000 in equity and the other two are underwater. I also have two rental properties in Florida; both have no mortgages. Should I put each property in its own LLC, or all five in one LLC? — J.M.

DEAR J.M.: First, let’s put everything in order. The property that you own free and clear in Las Vegas is no problem. Also, the rental properties in Florida have no mortgages. If you wish to put each in its own LLC, and frankly, that would be my choice, no problem.

Then there are the two you say are underwater. To be technically underwater, they would have to be mortgaged, so I am assuming that they are mortgaged. I can’t imagine why the mortgage company would allow you to take your name off of them, given the fact that the company is better protected having the property in your name and you having the responsibility of paying the obligation.

I will tell you that the separate properties I own and have owned in the past have all been in a separate corporation. An LLC would be my choice.

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