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PASS Accounts

How To Have A PASS And Still Have Enough Money To Live

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How can you keep money in a bank account that Social Security is going to monitor, yet have use of that money to live on? According to Thomas McCormack, Author of AIDS Benefit Handbook (Yale University Press):

Use a secured credit card. To obtain a secured credit card, you deposit money into a a designated bank account. The secured credit card is issued with limits at least equal to the amount you deposit, and possibly up to twice as much. You aren't allowed to withdraw money from the account while you have an oustanding credit balance. Secured credit cards are intended for people with poor credit or no credit

Using money in a bank account to secure a secured credit card qualifies for a PASS under Social Security's rules.

You can live on credit card charges or cash advances, yet keep an account open to satisfy PASS! To keep this solution viable, you'll have to be sure to meet minimum monthly payments to the credit card firm. That should be particularly easy. With each month's deposit of the money your PASS plan requires you to put in the bank, the credit card company will helpfully increase your credit limit by that much!

Better yet, if you're fortunate enough to use firms that give you a "double" credit line, you can actually have access to more money than you deposited.

For icing on the cake, there's one other detail you can arrange: when you take out the card, consider taking the small-fee life, disability and unemployment insurance that's offered to cardholders. This insurance will make your monthly payment if you invoke its disability or unemployment clause, and will pay off your balance when you die. This kind of insurance is almost never meaningfully "medically underwritten" so your health condition is not relevant.

A word to the wise: don't claim disability or unemployment while you expect to continue using the card, the PASS, or the secured account. Your card may be canceled for future charges, and your account balance may well be debited by the credit card company's insurer. This would be disastrous if you need to keep the bank account untouched in order to meet PASS rules, and therefore to keep your Medicaid and other benefits available.

If you have literally no assets to leave anyone, it may not be worthwhile to choose to pay a credit card balance life insurance premium. Its only function is to pay off the credit card bill after you die and thus prevent the credit card firm from going after any assets you hope to leave to loved ones.

Secured credit cards are often offered via late-night ads. To find out which banks offer "secure" credit cards and which ones have the best terms (interest rates, insurance options, "double-your-money" credit limits), call the non-profit Bankcard Holders of America at 540.389.5445. For a very nominal fee, they'll send you the most current list.

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