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Established Contributor
laboi_22
Posts: 634
Registered: ‎07-07-2011
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Effects of Closing Subprime Cards

[ Edited ]

Opinions regarding the closure of subprime cards:

 

I have a Capital One rebuilder - no annual fee and I have no interest in closing. It does have a high APR however I do not use it. This card has not hindered my ability to land prime cards with good CLs and APRs (even AMEX) which leads to my question: is there any reason why one should believe that having a subprime card as part of their credit portfolio would somehow cause prime lenders to decline applications?

 

Your thoughts please?? To many posts regarding this matter so please clarify and share past experiences.

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Established Contributor
AndyK
Posts: 913
Registered: ‎06-09-2011
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Re: Effects of Closing Subprime Cards


laboi_22 wrote:

Opinions regarding the closure of subprime cards:

 

I have a Capital One rebuilder - no annual fee and I have no interest in closing. It does have a high APR however I do not use it. This card has not hindered my ability to land prime cards with good CLs and APRs (even AMEX) which leads to my question: is there any reason why one should believe that having a subprime card as part of their credit portfolio would somehow cause prime lenders to decline applications?

 

Your thoughts please?? To many posts regarding this matter so please clarify and share past experiences.



I think the general recommendation to close is because the rebuilder cards won't grow with you, generally have hefty fees (monthly or annual) and high APR and low limits. Plus some creditors might not like you having more than X open accounts in general.

Beyond that, I don't see why it would be an issue. Maybe if your application goes into manual review and an underwriter doesn't like seeing a bunch of subprime banks on your report. But for an automated decision, I doubt it'll have any impact at all.

EQ 679 FICO (02/24/2012)
TU 721 FICO (03/10/2012)
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pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: Effects of Closing Subprime Cards

I have seen some people reporting being declined by AMEX because they had a First Preemie account on their reports. Kinda like being guilty by association. I think you don't have anything to worry about with cap1 though.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Mega Contributor
LS2982
Posts: 15,434
Registered: ‎04-09-2011
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Re: Effects of Closing Subprime Cards


laboi_22 wrote:

Opinions regarding the closure of subprime cards:

 

I have a Capital One rebuilder - no annual fee and I have no interest in closing. It does have a high APR however I do not use it. This card has not hindered my ability to land prime cards with good CLs and APRs (even AMEX) which leads to my question: is there any reason why one should believe that having a subprime card as part of their credit portfolio would somehow cause prime lenders to decline applications?

 

Your thoughts please?? To many posts regarding this matter so please clarify and share past experiences.


I would think prime lenders do look down on someone's CR if they see the likes of FP, CreditOne, Applied Bank etc.

 

Because it looks as though your still in rebuild mode and most ppl with these TL's do not have a year on the cards at that.




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Established Contributor
frogfan12
Posts: 872
Registered: ‎10-16-2010
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Re: Effects of Closing Subprime Cards

I don't think Capital One is a subprime lender. I've been approved for many things with Capital One being on my CR. They're one of my oldest accounts, so I will not be closing it. 


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ptkdude
Posts: 64
Registered: ‎03-25-2011
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Re: Effects of Closing Subprime Cards

Amex denied me because of an OPEN First Premier on my reports (it was included as a denial reason). Once it was closed, Amex approved me no problem.

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pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: Effects of Closing Subprime Cards

 

Yeah, Cap1 does have a number of prime cards, so I don't see any creditors getting nervous because of it.

 

First Preemie is known as a rebuilder only card, no prime cards at all.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Valued Contributor
jamesdwi
Posts: 1,949
Registered: ‎09-16-2011
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Re: Effects of Closing Subprime Cards

[ Edited ]

frogfan12 wrote:

I don't think Capital One is a subprime lender. I've been approved for many things with Capital One being on my CR. They're one of my oldest accounts, so I will not be closing it. 


Cap-One has both prime and sub-prime cards. and in the scheme things even CapOne subprime cards aren't terrible, some cards are only $39 a year and give rewards, Where some of the other companies mentioned have  costs equivalent to a AMEX platinum card each  year and give you a sub $500 CL. 

 

I have now two AMEX (Blue and Zync)  and Chase  Freedom card with multiple Cap One cards, 2 of mine and 1 AU card my wife, so CapOne is not a negative on your report escpecially if they report no lates and limits over $500. Not to mention 2x  HSBC MC cards,  Bestbuy and Sears.  

 

 

 

 


Cards: Chase Southwest 20k & CSP 10k & Freedom 6.6k & Amtrak 4.6k, FNBO DISC 14.9k Oregon Duck 5k, & AMEX BCP 15k & Hilton Surpass 7.5k & Zync NPSL, Sams Club MC 10k, Paypal Extras MC 6k, CapOne QS 2.5k, QS 750, Amazon 3.9k, Walmart 4.5k, Citi Simplicity 7k, HHonors Gold 1k (moved 5k CL to Simplicity), Discover IT 6.5k and a nice stack of store cards.
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Valued Contributor
crunching_numbers
Posts: 1,093
Registered: ‎02-15-2012
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Re: Effects of Closing Subprime Cards

[ Edited ]

ptkdude wrote:
Amex denied me because of an OPEN First Premier on my reports (it was included as a denial reason). Once it was closed, Amex approved me no problem.

Of course, that was because the act of closing the card made you SO much more credit worthy..  :smileylol:  Give me a break. That is the lamest denial I have heard yet.


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payingoffdebt001
Posts: 406
Registered: ‎04-15-2011
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Re: Effects of Closing Subprime Cards


ptkdude wrote:
Amex denied me because of an OPEN First Premier on my reports (it was included as a denial reason). Once it was closed, Amex approved me no problem.

 

 

WOW!!!  that is something else - so glad I'm hearing this.   I think its crazy but you are proof it does happen!


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