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Effects of Closing Subprime Cards

Established Contributor

Effects of Closing Subprime Cards

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.

Current Scores: EX - 728 FICO (5/11/13) TU - 771 FICO (7/02/13) EQ ??

Current Cards: Chase Freedom $5,000, CSP $5,700, BofA Visa Signature $15,000, AMEX BCE $6,000, Walmart $4,150, Gap Visa $10,000, JC Penny $5,800, Lowes $8,500, Dillard's AMEX $8,000, AMEX Hilton HHonors - $2,000, Chase United $12,000, Citi AAdvantage & Simplicity $6,000/$6,000, SPG AMEX $1,000
21 REPLIES
Established Contributor

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)
EX 703 FICO (05/05/2012)

Cards: NFCU cashRewards $14k, NFCU Platinum $14k, USAA Amex $7k, Amazon Visa $3k, Chase Freedom $2.5k, Amex Zync NPSL, Discover More $1k, Amazon Store $1.3k, Walmart Store $700
Super Contributor

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

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.




EQ FICO 548 3/3/16
Established Contributor

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. 


Starting Score: 760
Current Score: 716 Equifax 754 TU 736 Experian
Goal Score: 760
Contributor

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.
Super Contributor

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

Re: Effects of Closing Subprime Cards


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 & CSR 10k & CSP 10k & Freedom 6.6k & Amtrak/Freedom 4.6k, FNBO DISC 25.1k Oregon Duck 5k, & AMEX BCP 15k & Hilton Surpass 7.5k & Delta Gold 6k & Zync NPSL, Fidelity AMEX 17k Commerce5.9k & Cash Forward 7.5k & Sams Club MC 10k, Paypal Extras MC 7.5k, CapOne Venture 15k, QS 2.5k, QS 750, Amazon 5.9k, Walmart 10k, Citi Simplicity 9k, Discover IT 16k and a nice stack of store cards.
Last APP/HP 5/15/2017 Marcus Loan. 30k
Valued Contributor

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.

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


Starting Score: 693 TU FICO, 679 EQ FICO
Current Score: FICO 8 = 844(9/15) EQ, 827 TU, 811 EX (7/15); mortgage FICO= 758 (9/15)EQ5, 797 TU4, 748 EX2 (7/15)
Goal Score: 750+, but shooting for the 800's
Hyatt Visa Sig ($23K), Amex BCP (24.8K), BofA Travel Rew Sig (22.5K), B&N World MC (22.3K), Amex RP Gold (NPSL w/ S&T), Cash+ Sig (20K),United Mil+ExpSig (16.3K), FNBO Visa (13.1K), Hilton Surpass (10K), Freedom Visa Sig (8.6K), Disc It (16.4K), Citi Dia Pref MC (3.7K),Sam's MC (10K), Wally (7.5K), JCP(5.3K), Costco (2K)
Frequent Contributor

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!