Close card and open up new one or keep.

For just about anything you want to get off your chest about credit cards.
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mathman314
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Close card and open up new one or keep.

Postby mathman314 » Mon Dec 30, 2013 4:44 pm

I'm looking to close my 1FBUSA credit card; however, it is my first credit cc (Had it since Aug 2012.) I just requested the terms from them and I found out that it has a 29.9% APR, cash advances, and balance transfers as I just started building my credit. It also has a $25 AF, which can be waived every year if I call them and verify stuff. The only thing that is going to be getting charged on there is Netflix ($7.99 + tax.) The cc doesn't offer me rewards or anything and just served to build up my score. Should I go ahead and: Change the Netflix payment to my Discover, pay off the 1FBUSA and close the account so I don't have to worry about calling every year to get the AF waived?
Cards:
1FBUSA: 5.75k
Discover IT (for students): 4.6k
Chase Freedom (signature): 5k
Target REDcard: 1.5k
AmEx BlueCash Everyday: 5.5k

FICOs:
TU - 785 (December 2015)


MemberSince99
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Postby MemberSince99 » Mon Dec 30, 2013 5:09 pm

It's up to you, but if it were me, I would at least get one other prime card in my lineup before closing it, likely a Visa as Discover isn't accepted everywhere.

Ikarus
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Postby Ikarus » Mon Dec 30, 2013 5:21 pm

Go for more student cards: CitiForward, CitiDividend, and/or Bank of America BankAmericard Travel Rewards for Students.

Don't drop the card until the next annual fee appears on your statement. Then cancel the card before the money is due to continue the card.
Merrick Bank (Hooters) 4100
Cap One Quicksilver 4800
Discover it 2500
Citi Forward 8000
Chase Freedom 1000
AMEX Blue Cash Everyday 5500
Citi Dividend 7000
Cap One Visa Platinum 750 (CLOSED)

mathman314
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Postby mathman314 » Mon Dec 30, 2013 5:36 pm

Well, what would you do if it were up to you?

Let's say I keep this card till the end of August (most inquires would be dropped off), and open up X. That will be about 2 years with the 1fbusa and 8 mo. with discover so a 16 mo. AAoA. Fast forward 10 years right before 1fbusa gets dropped off of CR: 144 months, 128 months respectively and 120 months with X bringing AAoA at that point 130.667. After it gets dropped AAoA would be 124. Can someone verify if this is correct?

What % does AAoA play into the score if at all? And UTL?

If I do close it, would it be wise to close it when nothing is charged to my other cards so my UTL would stay at 0%?

EDIT: And I've always wondered...what exactly are the benefits for student cards?
Cards:
1FBUSA: 5.75k
Discover IT (for students): 4.6k
Chase Freedom (signature): 5k
Target REDcard: 1.5k
AmEx BlueCash Everyday: 5.5k

FICOs:
TU - 785 (December 2015)

MemberSince99
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Postby MemberSince99 » Mon Dec 30, 2013 5:51 pm

I would do what I recommended - open up at least one other new account before saying goodbye to the annual fee card.


I would not waste a lot of time and energy worrying about if dropping the annual fee card is going to destroy your credit. I've closed NUMEROUS accounts over the last 2 years and my current AAoA is about 5 years, and my score is not destroyed. You need to do what is best for your credit and life situation not agonize over how closing that card might lower your AAoA a bit.


UTL does have a direct and high impact on your score. I would hope you aren't carrying a balance on that card. If you are do NOT close it before it gets paid in full.


The BEST UTL for your score, just talking in terms of your score would be in the range of 1-4%. If you really want to squeeze EVERY single last point possible from your score that is what you should be shooting for.


It really doesn't have to turn into Einstein's theories here, though. I don't know why people just agonize over a credit card like it's life or death and oh my God the ramifications of this move will affect the entire rest of my existence here on Earth. It's just not that big a deal. Get a couple new better cards, close that one, move on and watch your score go up over time assuming you handle your credit properly. It doesn't need to be the Calculus final exam. I think people just feel everything is horribly complex and one wrong step will destroy their lives.
I've personally just done what I wanted. If I didn't like a card, I closed it. I've closed LOTS. My credit doesn't seem to be destroyed yet nor is my life over.


I can't put it any more simply than just do it.

rockyrock
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Postby rockyrock » Mon Dec 30, 2013 6:46 pm

MemberSince99 wrote:I've personally just done what I wanted. If I didn't like a card, I closed it. I've closed LOTS. My credit doesn't seem to be destroyed yet nor is my life over.


I can't put it any more simply than just do it.


+1

It may have a short-term neg impact but in the big picture it will get lost in all the other variables...
American Express (2005): Green & Blue Cash Everyday
Chase: Freedom & UA Club USAA: Signature Visa & American Express
Discover it Bank of Hawaii Hawaiian Airlines WEMC Synchrony Sam's MC
Navy FCU Platinum Visa Citi Double Cash & AT&T Access MC

Mrm-na
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Location: California, US

Postby Mrm-na » Mon Dec 30, 2013 7:34 pm

I agree with the above. I'm much more comfortable with 2 cards than only one, so replace it with something before you close it. But once it's replaced I'd probably close it, unless you have some bigger reason to worry about your FICO score in the near term.

I'm maybe being a hypocrite though. I still have my old Capital One account with an annual fee. I'm waiting until my utilization is down and score moves up to try to get it converted or at least the fee removed. But if that doesn't pan out then at some point I'll give up on them. I've only been hesitant because it's much older than any of my other accounts, and CapOne does have a card I wouldn't mind converting it to.
In your case, since the account in question is only ~1.3yrs old anyway, I'd be quicker to just drop it and move on to something more worth keeping.

MemberSince99
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Postby MemberSince99 » Mon Dec 30, 2013 7:48 pm

I totally understand how you are going about it Mrm-na. I would try to push the EO to convert to Quicksilver that would be worth keeping. So I hope you find success getting them to convert to something worthwhile. I do think you will have to go to the EO to be successful with that though, if there is a chance to do it.

mathman314
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Postby mathman314 » Thu Jan 02, 2014 2:13 pm

Thanks for the advice all. Just an update: Applied for a Chase Freedom on NYE and called this morning to find out I got approved for a 1.4k CL. I will most likely be closing the 1FBUSA account at the end of August since the card served its initial purpose (to build up my credit score.)
Cards:
1FBUSA: 5.75k
Discover IT (for students): 4.6k
Chase Freedom (signature): 5k
Target REDcard: 1.5k
AmEx BlueCash Everyday: 5.5k

FICOs:
TU - 785 (December 2015)

JoDa
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Location: United States

Postby JoDa » Thu Jan 02, 2014 8:19 pm

If you can *always* get out of the fee, keeping it open does no harm, only good. Granted, we're only talking less than 2 years of credit history and a small line, but soon enough, you'll be wanting more major credit like a mortgage or car loan, and with those, every point helps. When I recently refied, I saved almost half a point in interest because my score was *7* points higher than the "ballpark" I gave the officer when we first spoke. Yes, that was the difference between "very good" and "excellent" credit, but just having a slightly longer history or slightly lower usage ratio can make that difference. And as far as points go, $8 isn't going to be much, should you like using the automated Netflix payment to keep it active. Otherwise you could just use it for a small purchase every few months to keep it active.
CSP $19K
BOA $4K
UMP $11.5K
Target Visa $1.5K



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