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Secured card, to close or not to close?

Regular Contributor

Re: Secured card, to close or not to close?

In that case, I'd ask if there was no HP to graduate and if you keep your account history. If so, then keep the account. It could be beneficial
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Frequent Contributor

Re: Secured card, to close or not to close?


Creditplz wrote:
And oh no I have a BofA Cash Rewards, Discover, Neiman Marcus, Nordstrom,and now NFCU! Also do I leave a balance on it? I have a $27 balance on it and I know they refund the security deposit into the account anyways, so I'm not sure if I leave it with a Balance of pay it off.

From the US Bank website for the secured card:

When you've managed all of your credit obligations responsibly and consistently for 12 months, you'll be well on your way to a stronger credit standing, and we may be able to move you to an unsecured credit card product.

Based on that, the ability to "move you to an unsecured credit card" occurs at the 12-month mark. It's unclear whether that means 1) a product change of your existing secured card or 2) an invitation to apply for an unsecured card which likely would require a new application with a CR hard pull.

 

In either case, I'm inclined to close the US Bank secured card now because 1) based on my experience with another bank, secured cards don't graduate and 2) I don't like any of US Bank's card offerings so I'm not interested in building a relationship with them, but that's just me.

 

If you decide to close the secured card now, call US Bank and inquire what the account closing procedure is. Should you 1) close with a zero balance and have the full deposit refunded back to you or 2) close with a non-zero balance, pay that balance off with your deposit and have the remaining deposit refunded to you. You'll also want to verify how you will receive the refunded deposit, either by check or by EFT back into the linked bank account.

 

Just my 2 cents.

 

EDIT: I just read the Terms and Conditions and noticed there's a $29 AF. I don't like paying for the privilege of having credit, so I'm even more inclined to close the account now.

When advising people who are new or rebuilding credit, my current advice (4/2016) is to go to the Capital One' See If You're Pre-Qualified page which doesn't cost you a hard pull and get the Capital One Platinum card if offered because it is non-secured with no AF. Or my second choice would be the Capital One Secured MasterCard.



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