Should I close capital one card?

[koalas123]

Hi.  I'm at 20 year old college student and I just need some quick advice about whether I should close my Capital one credit card.  It was my first credit and its limit is $750.  It has an annual fee of $29 a year.  The other two cards I have are:

Citi Forward - $4700

Bank of America Student Platinum Plus - $2500

Both of these other cards don't have any annual fees.  The thing is the annual fee for my Capital One card is coming up in about two months and I got them to waive it off last year, but I don't know if they will agree to it this year because of the credit crunch...  If they choose not to waive it, should I close it?  Btw I don't owe anything on my other cards if that factors into closing the Capital One card or not.  Thanks in advance for the help!

[Anonymous]

 I'd pay off the card and threaten to close it out unless they consider eliminating the fee all together. 

[koalas123]

Oops.  I meant to say that I didn't owe anything on any cards.  I'm debt free!  Sorry for the confusion

[austinguy907]

I would go ahead and just close it.  Cap 1 is just a pain in the @$$ to deal with sometimes.  I closed mine out when they were going through changing terms & conditions last spring.  It's not worth the hassle to keep a $750 limit.  Only thing I would try before doing that is to request a limit increase on the other 2 cards if you have had them for more than 6 months.  Maybe apply for a Discover or local CU card to replace it and you'll come out ahead instead of having to call Cap 1 every year to waive their fee.  Most CU's will issue a generous limit if your CR is in good condition which it must be for BoA to issue an account.

[koalas123]

Last time I pulled my credit report here, my equinix score was 723.  I just recently asked for a credit increase on both cards.  Citi increased my limit another $1500 to $4700 while Bank of America told me that I had already reached the highest credit that their Student card would offer.  I kind of wanted to apply for an Amex blue card, but at the same time I think I'm ok where I'm at.  My total credit right now is $7200 and I think thats enough for a college student for right now... What do you think?  Any advice is appreciated.

[austinguy907]

It sounds like you're off to a good start.  Cancel the Cap 1 and keep the other 2 for now.  Let your accounts age a little bit before making a move to another one unless you really need it.  At the end of the day it comes down to how much risk you're willing to accept by having those CL's available for use.  Being a student and all it's probably best to keep the total CL under 10K until you're more established with a higher income that you can use to pay in full if you had to and build some reserves.  A good target is 1/3 of  your annual income I suppose would be a fair place to start for total CL.  Some places won't even allow anything over 2 times your monthly income these days for a CL. 

[koalas123]

Hmm ok. Thanks for the good advice. I guess considering my goal income is still around 12k to 15k, its more than good enough for right now

[score_building]

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@koalas123 wrote:

Last time I pulled my credit report here, my equinix score was 723.  I just recently asked for a credit increase on both cards.  Citi increased my limit another $1500 to $4700 while Bank of America told me that I had already reached the highest credit that their Student card would offer.  I kind of wanted to apply for an Amex blue card, but at the same time I think I'm ok where I'm at.  My total credit right now is $7200 and I think thats enough for a college student for right now... What do you think?  Any advice is appreciated.

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At some point you could call to see if they will PC from the student card to a regular one.

The earlier you get in with amex the better.  I had one in college and was able to reclaim that member since date on new amex apps almost 20 years later greatly increasing AAoA.

[koalas123]

I think my forward card is already a normal card since my Apr started at 12%. But bank of America won't let me graduate my card until I graduate

[Wolf3]

IMO, I would keep the card and try to get the fee waived.   Then ask for a product change post graduation 

Capital One has 2 benefits that I think make it work keeping and which most CC don't offer.

1.  No Exchange fee on international purchases.    Most charge 3 to 4%.  They actually eat the 1% fee that the VISA network charges.  

2.  Auto Rental Insurance coverage (at not cost) that is primary rather than secondary.   If you wreck the rental, they pay it all,   Secondary coverage which most offer, only pays what your personal auto insurance doesn't , like the deductible.    You don't want that on your insurance record.