Secured Credit Card to regular one, question about Credit history

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JackLane
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Secured Credit Card to regular one, question about Credit history

Postby JackLane » Mon Mar 16, 2015 12:48 pm

Hello folks,

I have a secured credit card from a local credit union. It was my only card for first 5 years (total credit history 7 years), then I got Chase Freedom and Costco AMEX. Since I got Freedom and AMEX, I essentially do not use the credit union card.

I would like to convert this secured card to the regular one. I asked the CU if they can convert it, but I was told that I have to apply. I wonder if that will be a 'new credit card application and appear as a hard credit inquiry, and if I will lose the credit history of that secured card? (The CU rep says NO, but I don't trust them. They have given me wrong information in the past.)

In all honesty, I don't need this card but I am sticking with the card because it is the oldest card and I don't want to lose that 5 year history. I don't mind taking a hit for a while if I can close the card. I don't plan any major financial decision in near future.

Many thanks in advance.
Chase Freedom 04/2012. $6500 | Costco AmEx 10/2012 $8100 | AmEx BlueCash 06/2015, $15000 |Discover It 07/2015, $5200 |Amazon Store Prime 01/2016 $2200
Local Credit Union secured card, 12/2009 - Closed 02/2015
Tu-764, Ex-764


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PlyrStar93
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Postby PlyrStar93 » Mon Mar 16, 2015 12:59 pm

Looks like they just want you to open a new account. Thus, hard inquiry with new account lowering AAoA. By just opening the account, your total length of history won't decrease. If you close that card, it will fall off your report after 10 years, but not right away.

So, the rep is correct about history issue--you will not lose history of your secured card, even if you close it and after a maximum of 10 years. That being said, it does fall off after 10 years, though it will be plenty of time to have other accounts aged. However, he/she is wrong on the inquiry issue, unless the credit union does not perform a hard pull per their underwriting criteria. I still bet they will hard pull you if you open a new account with them, since the only case I know about opening new credit card without hard pull is through the Shopping Cart Trick.

If you don't need to use it, you may simply close the card without worrying about history. By closing it you also no longer need to monitor fraudulent activities on the card, so that saves you time and work. For the next 10 years you still have that good payment record reported, as well as history all the way back there. Even when it falls off, your other accounts surely provide more than 10 years of history at that time.
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
Chase Freedom Visa Signature $7000 6/2014 | Citi ThankYou Premier Visa Signature $5000 1/2015
All EMV.

takeshi
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Postby takeshi » Tue Mar 17, 2015 8:31 am

JackLane wrote:I would like to convert this secured card to the regular one. I asked the CU if they can convert it, but I was told that I have to apply. I wonder if that will be a 'new credit card application and appear as a hard credit inquiry,

Yes.

JackLane wrote:and if I will lose the credit history of that secured card? (The CU rep says NO, but I don't trust them. They have given me wrong information in the past.)

No. You don't lose existing account history by applying for another account. PlyrSta93's post covers the impacts.



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