When should I close out my first credit card?

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Moizy
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When should I close out my first credit card?

Postby Moizy » Sat Feb 01, 2014 6:39 pm

A year ago I posted here inquiring on which secured credit card to go with. After getting denied for a secured cc from Capital One, I applied for a US Bank Harley Davidson secured cc. It was decent considering no annual fee for it, and gives me a free experian score every month. There is one downside to this card that I just relaized, and I'm not sure if this is common between other secured cards but in order for me to get my initial deposit of $300 back, US Bank wants to do a credit check, a hard hit, in order to consider me for an unsecured card and then return my deposit to me.

It has been a year since I had that card so I want my deposit back but I do not want a hard pull on my credit for the same type of card, with interest, minimal rewards only redeemable at Harley Davidson.

So I went ahead and Applied for a Chase Freedom card about 4 days ago, got approved for 4.5k. Waiting on the card to arrive now. The reason I decided to apply for chase was because I bank with them, and had also read that the Chase Freedom card is a pretty good card. Also had a pretty good offer, $100 bucks on $500 spent and 5% revolving categories year round, 0% for 15 months. Great deal for me.


My question is, What should I now do with my secured cc? Should I go ahead and close it out? How will it affect my credit if I do?


My credit score the last time I checked with Credit Karma was about 722. I know it's not a reliable source but we're looking at the score to be somewhere around there.

What do you guys suggest I do?

As of today, I only have two open credit lines on my credit, one from US Bank and one from Chase, I plan to keep this Chase card for the rest of my life and have it as my longest open credit account.


MemberSince99
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Postby MemberSince99 » Sat Feb 01, 2014 6:56 pm

Your score will be the best it can be with at least 2 cards, and possibly 3. So if you are going for high score you will want one or two other cards. You don't NEED to do that unless you just want every point possible.


What I'd do is wait for the Freedom and the 4.5k line to appear on your credit reports, then go for one or maybe two other cards that suit your life. For example, the Freedom is a wonderful card with 5% categories, which includes gas, but do you want more money also on say groceries? Then you could look into a card that offers more on groceries. Or what about utilities? Then you could consider the Barclay Rewards card for 2% there. And do you travel? Or plan to? If so you could look at a travel card.


Once these are reporting, feel free to close the secured card and just let time do its work and continue to build your history and your score. Maybe others will disagree but with a secured card I feel as soon as you can get good unsecured cards, you are better off to get your money back from the secured card, and if they won't play without a hard pull, you do have other options.

Moizy
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Postby Moizy » Sat Feb 01, 2014 7:03 pm

Thank you so much for your response.

That does make sense to me as well because as a lender extending credit to an applicant if I am to see Short credit history It would be a little risky to do actually lend money. In response to what you said though, I believe the Chase credit card would be best for me as other cards would not apply to me as much because I do not shop in other categories you mentioned, someone else in my household buys groceries haha.


Anyways, the question in response to that is, does another credit on my report have to be from a credit card? Can it be from, say, an auto loan? Would that be just as beneficial as another credit card on my report?

MemberSince99
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Postby MemberSince99 » Sat Feb 01, 2014 7:18 pm

Sure an auto loan is an installment loan rather than a revolving account like a credit card. Having both types will maximize your score.


Just in terms of best score 2 to 3 cards is what FICO recommends. Having installment history that is good on top of that will also increase your score and be seen as a positive when you go to get another car or mortgage.


Just don't make the mistake of getting debt to build your score, or running up cards and carrying balances in any case and you'll be fine.

Moizy
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Postby Moizy » Thu Feb 06, 2014 1:00 pm

MemberSince99 wrote:Sure an auto loan is an installment loan rather than a revolving account like a credit card. Having both types will maximize your score.


Just in terms of best score 2 to 3 cards is what FICO recommends. Having installment history that is good on top of that will also increase your score and be seen as a positive when you go to get another car or mortgage.


Just don't make the mistake of getting debt to build your score, or running up cards and carrying balances in any case and you'll be fine.


This is off topic, but in your opinion, what is the best site to check out my credit scores, aside from myFico?

MemberSince99
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Postby MemberSince99 » Thu Feb 06, 2014 2:22 pm

Honestly FAKOs don't really mean much so you might as well use the free services like Credit Karma and Credit Sesame. The FICOs are the only ones that have any real meaning, but fortunately CK and CS are free even though they are FAKOs. They will do fine until you have a real need to know your actual FICOs.


CK gives you TU and CS gives you EX (I don't know of a free one for EQ).

Drudai
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Postby Drudai » Thu Feb 06, 2014 4:28 pm

A couple of other free, but FAKO sites is Quizzle & Credit.com. I compare all the scores (Quizzle, Credit, CK & CS) to give me an idea of where I am, even though they're not spot on.
[size=60]
Chase Freedom: $800
Chase Slate: $500
Discover It: $2000
Sears: $2000
US Bank: $500
AMEX BCE: $2000
[/size]

samhradh
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Postby samhradh » Thu Feb 06, 2014 4:40 pm

Make sure to read the paperwork Chase sends with your Freedom. Your real FICO score will be included in the information.
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).

MemberSince99
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Postby MemberSince99 » Thu Feb 06, 2014 4:48 pm

samhradh wrote:Make sure to read the paperwork Chase sends with your Freedom. Your real FICO score will be included in the information.




That's true only if you don't get the best terms. I did not get a score with my Freedom.

samhradh
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Postby samhradh » Thu Feb 06, 2014 9:19 pm

Best terms?
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).



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