Closing Secured Cards?

[mspiggybank]

I looked back in the forums, but there seems to be no hard and fast rule when it comes to closing secured cards, so I'm reaching out for advice. I was just approved for Chase Freedom with a $2,000 limit. I currently have two secured cards with the following specs: CapitalOne - open 3 years, $200 secured plus CI of $550 for a total of $750 credit limit Wells Fargo - open almost 2 years. $1000 all secured. I bank with them so that's how I ended up with the secured card. Any thoughts on whether I should close either of these? The money would come in handy as my husband and I are working to pay off his credit card debt ($7500 with BoA at 90% usage). However, I still need to build my credit. My last credit karma score was 564. Thanks in advance for any advice.

[Anonymous]

I remember Wells Fargo graduating at some point, Capital One likely never will.  Ultimately it's your call.

if the card doesn't graduate, or otherwise comes with an AF, I'd probably close it out.  

Chase is a nice card to get started with, I also have the Freedom at that CL.  

[tryingtog3tmycr3ditright]

I was thinking the same thing, I have one secured card with Cap One, after two yrs they gave me an increase which they could've kept..I am really considering closing this card, my other Cap 1 card is unsecured I asked if they can be combined and they told me no

[mspiggybank]

I heard WF is tough to graduate so maybe I'll try to call for review and if I get denied close both and put that money to good use. Thanks for the advice!

[Revelate]

Hrm.

In this particular situation, it's a tradeoff: fewer cards will hurt you from a credit perspective, but paying off that debt is important.

My general theory regarding secured card closure is this:

1) If I REALLY need money I close it.  Finances > FICO.

2) If I need it for FICO or spending purposes I keep it

3) If it's costing me money (AF) I toss it if I don't need it.

4) If it's not costing me money ($0 AF), I leave it open till I need the underlying deposit

Personally I still have a secured card from DCU that I got 3 years ago when I started this adventure; however, the 2K underlying it hasn't been needed for anything and it's still racking up pretty OK's as one of my oldest positive tradelines.

[mspiggybank]

Thank you. Those are great guidelines!

[Anonymous]

At the beginning of my credit journey I had a credit score of 580 and had some pretty petty outstanding debts (that equaled about $2500 dollars). This journey started in 8/2013 with a secured PNC credit card from my bank with a limit of $250. They charge $3 dollars a month in fees for the card. Since then I've paid off my debt, I have a CO MC with a $4,000 credit limit, a CO Visa with a $500 credit limit, an AMEX Green Card, a Fingerhut account, and a Chase Amazon Rewards card with a credit limit of $2000. My credit rating is now between 650-680 and I try and pay off my cards every month (I've been on time 100% of the time) and I stay within 30 percent credit utilization. My question is, do I get rid of this secured card? Does it help me or hinder me now? I no longer use PNC Bank (I'm much happier with CO 360) and I'd like to rid myself of this card (because it shows up as a secured card) but it is my oldest card by about 4-6 months. I'm not sure what the best move is. Thoughts?

[Revelate]

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@Anonymous wrote:

At the beginning of my credit journey I had a credit score of 580 and had some pretty petty outstanding debts (that equaled about $2500 dollars). This journey started in 8/2013 with a secured PNC credit card from my bank with a limit of $250. They charge $3 dollars a month in fees for the card. Since then I've paid off my debt, I have a CO MC with a $4,000 credit limit, a CO Visa with a $500 credit limit, an AMEX Green Card, a Fingerhut account, and a Chase Amazon Rewards card with a credit limit of $2000. My credit rating is now between 650-680 and I try and pay off my cards every month (I've been on time 100% of the time) and I stay within 30 percent credit utilization. My question is, do I get rid of this secured card? Does it help me or hinder me now? I no longer use PNC Bank (I'm much happier with CO 360) and I'd like to rid myself of this card (because it shows up as a secured card) but it is my oldest card by about 4-6 months. I'm not sure what the best move is. Thoughts?

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Welcome to the forums!

If it were costing me $24/year I'd close it personally with that many other credit cards.  Won't affect you now unless you have extremely high balances, which you don't, and it makes a material difference to your utilization, and by the time it falls off your report you'll have plenty of other tradelines such that it won't matter.

Great start btw!