- Platinum Member
- Posts: 88
- Joined: Thu Aug 02, 2012 1:18 am
- Location: Nebraska
The big thing short term is going to be utilization. The card will continue to report positive on your credit report as long as you keep up with payments or pay it off, however you will loose the credit limit. Where closing a card becomes a problem is let's say you carry a balance of $4,000. Let's say the card you carry the balance on has a limit of $6,000 and you have another card with no balance and a limit of $8,000. This would give you total available credit of $14,000 and you would only be using 29% of your total available credit. If you closed the card with the $8,000 limit, your credit score would see you as using $4,000 of your available $6,000 or 67% of your available credit.
Now looking at your cards, you only have $500 credit on your Capital One card so loosing that credit limit would be a non-issue unless you are close to maxed out on a couple others. Next comes age of the accounts and it appears your Wells Fargo College Cash Back is the same age as your Capital One account so if you keep the Wells Fargo and close Capital One and since it's only 2.5 years I don't see there would be much lost as for the age of your accounts and yes, old accounts can hang around for up to 10 years, but if your account is current when closed that won't hurt you.
Capital One is good for beginners, they give credit to people when nobody else will and they do help with building/rebuilding credit, but they are good at giving people a platinum card with no rewards $500 credit limit, annual fee and high interest rate, but then just leaving them there. The problem is, when you are ready for a better card, you have to contact them and get approved for a better card, then you end up having to close the card you currently have. When you qualify for better cards from Chase, Citi, Discover, Amex, there's really no point in looking at Capital One for a better card.
With a small limit and a short history, closing the card now would be better than waiting. If you are not going to use the card you take a couple of risks (1) if you throw it in a drawer, someone could always find in months later and use it (2) If left unused, you risk the card being closed by Capital One, which would look bad. Also if you keep the card, the account will age and you don't want it to be your oldest card 10 years down the road.
My qualifications to provide this answer: I stayed at a Holiday Inn Express last night.