That seems like a horrible deal.

Unless you have bottom of the barrel credit you can get a secured credit card from People's Trust or Home Trust --- better credit gives you Capital One and CIBC as options -- even better almost any financial institution. Point being is that getting a secured credit card is not hard and if your credit is so bad that getting one is not an option even from Home Trust then there is no point in getting one as having a card will give you no benefits with respect to improving credit.

It seems like you give people $500 in credit and $500 goes to pay for an educational program. Basic personal finance doesn't need an educational program and it certainly doesn't take two years to teach if it did. Also it isn't clear if the 39% is on the whole $1000 or just on the $500 since if it is on the whole $1000 that would in effect make your interest rate 78% and a violation of usury laws.

Hey Dave,
This needs alot of questions answered...
1) are you licensed to lend money?

To confirm, from your $1000 loan, $500 goes to the creditor, and 500 goes to you... and you're charging 39% interest on the top.

Can you confirm that you're licensed in all provinces in Canada please...

I won't promote this system at all unless I see some proof of credentials... otherwise this sounds a bit scammy to me.

Hi guys.Dave Baker here from Newstart Canada.I have introduced a pilot program to help people get a credit card.Basically it goes like this.I loan the customer $1000 today without any history with me regardless of credit rating.The interest rate starts at 39% and is lowered every 6 months based on repayment history.$500 is sent off to the credit card company and $500 covers my 2 year program.I call my program "Better Credit Canada".It is a whole bundle of things including credit reporting,webinars ,books etc.I can assure you there is value.Once you establish a good repayment record ,you can borrow more just like a line of credit.You can pay it down without penalty anytime.Open bancrupts are included but they must get a prepaid card until they are discharges.I am excited because you get two new trade lines!Mine and the card.I am looking for feedback before I roll this out to the public!!!

YES, YES and YES

That is a well written and good response.

The person asking probably applied for a ton of credit and only now that he was rejected is he going the secured route. Another hard hit isn't much concern since by the time the secured card has a history the hits will be 18 months old.

I saw this question over at answers.yahoo.com about secured credit cards

My answer is as follows:
Even though the card is secured, it still has a credit component... that means it will always do a hard inquiry for a new application, and as well report to the Canadian credit bureaus Equifax and Transunion.

A secured credit card is just that, a credit card..
Prepaid cards are different in that they don't report to the credit bureaus.

Prepaid cards are those that you deposit money into the account... You can withdraw only the balance of the account.. You can't take a prepaid card into debt status.

Secured credit card with credit reporting, but no credit check?
I'm looking to open a secured credit card to improve my credit score, but I don't want another hard inquiry on my credit report. Are there any secured credit cards that will not check my credit, but still report to the credit reporting agencies?

I may be asking too much, but I figured I'd ask anyway :)
http://answers.yahoo.com/question/index?qid=20100106182548AAv5NGx