Should I close Secured Credit Card?

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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rwockenf
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Should I close Secured Credit Card?

Postby rwockenf » Fri Jul 10, 2015 2:13 pm

I got a secured Credit Card through Capital One about 5 years ago. It has a $1650 limit and a $29 annual fee (22.99% interest rate). I don't ever use the card because I have since gotten other unsecured Credit Cards (AMEX and DISC). It just sits in my safe. It is the oldest CC on my Credit Report, but I am considering closing it because 1) I never use it 2) $29 annual fee 3) low limit 4) high interest rate.

I hesitate to close it because of the impact it might have on my AAOA. I am attempting to rebuild my credit after years of neglecting it and don't want to do any further damage, but I don't like the idea of paying $29 to keep a card I will never use (or use sparingly if I forced myself to) especially since it has such a low limit. My thinking is that I might close the account, and use the $1650 towards debt I have on the other cards. OR should I just eat the $29 and keep it open. OR should I contact Capital One and see if they will transfer the secured line over to an unsecured card? I just got my discover 2 months ago and have 2 Hard Inquiries on my Report.

Just looking for any advice. Much appreciated. Thank you.


Whatamuji
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Re: Should I close Secured Credit Card?

Postby Whatamuji » Fri Jul 10, 2015 2:38 pm

I would look into seeing if they will roll your card into an unsecured Platinum at the least and at the most a Quicksilver. I had a unsecured Platinum without AF and they rolled it into a Quicksilver for me after just a couple months of use.
Kohls: $300, Discover IT: $1.8k, Capital One Quicksilver: $2k, Amazon Store Card: $2.2k, BoA Cash Rewards: 1k, Chase Freedom: 3.2k, AMEX HHonors 3k

CC Deville
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Re: Should I close Secured Credit Card?

Postby CC Deville » Sat Jul 11, 2015 8:23 pm

Whatamuji wrote:I would look into seeing if they will roll your card into an unsecured Platinum at the least and at the most a Quicksilver. I had a unsecured Platinum without AF and they rolled it into a Quicksilver for me after just a couple months of use.


+1

If a front line customer service rep says that is impossible, contact the Executive Office (Google this and you will find how to accomplish that; it is simply emailing the CEO, requesting a telephone call; they will call back within 2 weeks) to see what can be done. If they refuse to unsecure the card and give you better terms than I would close it. The trade line will stay on your credit report for 10 years and will be included in your average age of credit; and in 10 years, provided you didn't screw up, your credit will easily handle having that account fall off.

Hint: it may help your case if you use the account a few times before requesting the upgrade. If the $29 fee is a few months away I would do that. Maybe charge your coffee's or some other nominal charges to it and pay it off straight away.

ingramjuan
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Re: Should I close Secured Credit Card?

Postby ingramjuan » Sun Jul 12, 2015 11:20 pm

Capital One gave me my first card and it was secured ($800). I had the card for about 6 years and never asked for a CL increase and or asked for it to be unsecured. Well since it was my first card I was never going to close it and I just decided to pay the annual fee yearly and charge a few items here and there and just pay in full. Capital One actually made the card unsecured and took the balance up to $3000 after I made a phone call. I still have the annual fee but at least I have a higher cl.

I would suggest keeping the card open.
CARDS:
Capital One Platinum (2001) |Capital One QuickSilver World (2002) | Amex Gold Delta (2013) | Best Buy Visa (2013) |Discover It (2015) | Amex Platinum (2015)

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KreditKing
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Re: Should I close Secured Credit Card?

Postby KreditKing » Mon Jul 27, 2015 5:46 pm

I have a couple of secured cards. Don't need them anymore, but I keep them open. The terms on both the cards aren't bad. No AF, No other questionable or undesirable fees. Mostly keeping them because of the longevity.

takeshi
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Re: Should I close Secured Credit Card?

Postby takeshi » Tue Jul 28, 2015 8:08 am

rwockenf wrote:I hesitate to close it because of the impact it might have on my AAOA.

I don't recall seeing this thread before but closing a card will not reduce your AAoA. AAoA includes closed accounts on your reports.

Vermonster
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Re: Should I close Secured Credit Card?

Postby Vermonster » Tue Jul 28, 2015 8:30 am

takeshi wrote:
rwockenf wrote:I hesitate to close it because of the impact it might have on my AAOA.

I don't recall seeing this thread before but closing a card will not reduce your AAoA. AAoA includes closed accounts on your reports.

It will eventually as closed accounts fall off after 10 years. But there is a good chance that your AAoA will be pretty solid by then.
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rwockenf
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Re: Should I close Secured Credit Card?

Postby rwockenf » Tue Jul 28, 2015 9:45 am

Update: I spoke with CO and they cut the AF in half, so I am going to keep it open for now. But I will most likely end up closing it in the next year. Thanks for all the responses.

ingramjuan
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Re: Should I close Secured Credit Card?

Postby ingramjuan » Tue Jul 28, 2015 9:00 pm

rwockenf wrote:Update: I spoke with CO and they cut the AF in half, so I am going to keep it open for now. But I will most likely end up closing it in the next year. Thanks for all the responses.


Good, I called this week and asked for my yearly fee to be waived, and they did.
CARDS:
Capital One Platinum (2001) |Capital One QuickSilver World (2002) | Amex Gold Delta (2013) | Best Buy Visa (2013) |Discover It (2015) | Amex Platinum (2015)

Gardening Since: June, 2015

Next Cards:
Personal: Chase Freedom Unlimited
Business: Amex Plum
Store Card: Lowes

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CarefulBuilder14
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Re: Should I close Secured Credit Card?

Postby CarefulBuilder14 » Tue Jul 28, 2015 9:20 pm

Just based on anecdotal evidence, it seems that the FICO benefit from a high AAoA has rapidly diminishing marginal returns. An AAoA of three years is better than one, but ten years isn't that much better than five.

Once a person has some occasionally-useful, no-AF (so protected in the event nerfing) cards in place, I'd say it's generally time to let go of secured cards.

Or does a high AAoA matter a lot more if you have baddies?
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when



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