Explain please: Why would one close credit cards for a secured card?

[BrandonSS]

Saw this in another thread "3. Pay all credit cards off, GW until my fingers bleed, Get a secured card"

Why would one that currently has open CC's want/need a secured card?  Is a secured card a better credit builder than a regular card?

I ask because I just opened a Capital One Rewards card since I am rebuilding my credit and dont currently have an open card.  They gave me a tiny $300 credit limit, but better than nothing.    Just wondering if i should accept it or if i should go with a secured card for some reason?

[laz98]

are you sure they are open accounts?  they might be closed accounts that still have a balance that is slowly being paid off.  sometimes people do this to keep a lower interest rate.

[BrandonSS]

good point.  They may be bad accounts.

So I should stick with the Capital One card instead of going secured?

[laz98]

nothing wrong with capital one.  if you happen to have some extra cash laying around, i guess you could open a secured card with a 1k limit or higher, so that maybe (and i emphasize MAYBE) later on, it will be easier to get better creditors to give you higher credit limits.  otherwise, no worries!

[haulingthescoreup]

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@BrandonSS wrote:

Saw this in another thread "3. Pay all credit cards off, GW until my fingers bleed, Get a secured card"

Why would one that currently has open CC's want/need a secured card?  Is a secured card a better credit builder than a regular card?

I ask because I just opened a Capital One Rewards card since I am rebuilding my credit and dont currently have an open card.  They gave me a tiny $300 credit limit, but better than nothing.    Just wondering if i should accept it or if i should go with a secured card for some reason?

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From your thread title, it seems like you were thinking that this other member planned to close their cards after PIF'ing, although I don't see that mentioned. But then in your post, you ask why one would get a secured card with currently-open CC's. Just checking, I wasn't sure where you were going.

Some people go with secured cards in that situation if they have a lot of cash that they can tie up in a secured card, so as to finally get a card with a decent CL.

Others get a secured card from a major lender in hopes that it will help them get a non-secured card from the same lender with time.

Sorry, these were probably already said. I just got distracted by the "why would one close credit cards" bit, because paying them off doesn't mean closing them. It just means having a $0 balance, and no longer paying any interest.

[Wolf3]

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@BrandonSS wrote:

good point.  They may be bad accounts.

So I should stick with the Capital One card instead of going secured?

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I would take the Capital One card.    You could also get a secured card if you wanted to get a big limit.  IMO, it is better to rebuild with 2 or 3 cards.