Can I apply for a credit card secured by my 401k funds

Hi Percy,

Welcome to the forums.

As far as I know, the 401k cannot be kept as collateral for any loan since it is an asset protected from creditors.

Take Care

Hi Percy,

I agree with Sara that you cannot use 401 k retirement funds as collateral to get any loan from banks or credit card companies.

Best of luck,
Larry

Yep everyone here is correct. It is definately protected from creditors. I am glad that it is set up that way. By the way social security is looking we may very need it as a way of survival when we get up there.

Keeping it safe from creditors is probably the best thing to do, don't risk what you have worked for your whole life for a card.

That is very true. Your 401k is your future. No credit card is worth that.

I have seen people cash out their 401k plan to buy frivioulous items, I see people that loose their jobs that end up living off their 401k while they are unemployed, some use it smart, some not so smart, I guess it is all on how the person looks into the future. I would not use it as collateral on anything and risk loosing it. You work hard to build it up.

I know my husband came in handy at a very desperate time. Hada we not had that security blanket at the time I'm not so sure where we would be today. Since using ours a few years ago (when he had to change jobs)we have been aggresivly rebuilding the funds and now have m ore in there than if we would have never cashed it out. We figure it is an investment everyone should have. Its nice that work places are now matching employee contributions by up to 100%.

That is good that you have the opportunity to rebuild it at a pace that made it bigger than before, my husbands company was bought out by a bigger one and we have increased our 401k as well. We will keep this one for what it is meant for. Cashing out in the past was just too easy, this time around it is staying right where it is.

I just got our statement from 401k. We really have been taking some hits. This quarter we were minus $12.00 that they deducted from his account and that was on top of the money his company added. We are at moderate risk cause we were trying to build it quickly. Everyone says to leave it how it is or if every one does it it will cause a worse recession. What do you think?

No, unfortunately there are401(k) is a retirement plan and they are protected from creditors. Work on improving your credit score instead, so that you can apply for a card. But even if the policies changed and credit card companies and banks start accepting 401(k) funds as security deposit, risking what you have worked for just for a card is not worth it. If you are contributing regularly to your 401(k) now, make sure that your contributions aren't put to waste.

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No, dear, there are. I agree with everyone on here. Contributions you make to your 401(k) retirement savings are protected from creditors so they will not accept it. But why would you want to use your 401(k) funds as your security when you can apply for a credit card with bad credit. You just simply apply for a secured credit card and deposit an amount that you can completely afford? Do not risk your retirement savings in exchange for a credit card. Just simply deposit the amount that you can afford, no matter how small or big the amount is, and manage your card well, so that the bank eventually issues you a regular card.

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Sorry you cannot use 401 k retirement funds as collateral to get any loan.