Should I close this card?

ray8806 · ‎02-13-2015

Back in August when I started my revolving credit journey, I got a Visa card from a CU. It was considered one of their starter cards with only a $500 limit and 14.99% APR. It was my understanding that the card will not age or increase or anything and the highest limit that they will allow for the card is $500. I'd have to go through a whole new application to get one of their regular cards. Since I've moved from that area and that CU is no longer my primary banking institution, would it be wise to close that card even though my revolving history is short?

EQ: 710(FICO) EX: 695(FICO) TU: 708(FICO)

Anonymous · ‎02-13-2015

@ray8806 wrote:
Back in August when I started my revolving credit journey, I got a Visa card from a CU. It was considered one of their starter cards with only a $500 limit and 14.99% APR. It was my understanding that the card will not age or increase or anything and the highest limit that they will allow for the card is $500. I'd have to go through a whole new application to get one of their regular cards. Since I've moved from that area and that CU is no longer my primary banking institution, would it be wise to close that card even though my revolving history is short?

If it costs nothing and the APR isn't terrible. Why not just keep it for now?

abhowmick18 · ‎02-13-2015

you shouldn't close any cards on your own just for backdating & overall utilization purposes. just keep the balance at zero and leave that card. if you close a card it can/will negatively effect your score.

Anonymous · ‎02-13-2015

i would keep it and its a extra $500 cushion you have.

App_Addict · ‎02-13-2015

It deserves a nice sock pillow!

CURRENT SCORES: TU: 698 21 Apps / EX: 644 28 Apps / AAoA: 4.4 Yrs. / Util. 5% / Goal: 750 by 12/22

NRB525 · ‎02-13-2015

@abhowmick18 wrote:
you shouldn't close any cards on your own just for backdating & overall utilization purposes. just keep the balance at zero and leave that card. if you close a card it can/will negatively effect your score.

I don't think this is the case. A closed card is simply not an avaialble credit line. The payment history, while it reports, just is what it is, same as any other card. People put too much angst into trying to avoid closing cards. It happens. It's no big deal. And, in some cases, you SHOULD close a card if you aren't going to benefit from it and you want to reduce the number of cards you have outstanding for future app space... after thinking very carefully about how the card will or will not benefit you. It's not a quick decision, to be sure, but can be necessary to do so.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765

ray8806 · ‎02-14-2015

Well it is my second card. Not my oldest card, and I now have way better ones like CSP, AmEx Delta Gold, etc. that have much higher limits.

I don't really see where I'd ever use this one.

EQ: 710(FICO) EX: 695(FICO) TU: 708(FICO)

Anonymous · ‎02-14-2015

@NRB525 wrote:
@abhowmick18 wrote:
you shouldn't close any cards on your own just for backdating & overall utilization purposes. just keep the balance at zero and leave that card. if you close a card it can/will negatively effect your score.
I don't think this is the case. A closed card is simply not an avaialble credit line. The payment history, while it reports, just is what it is, same as any other card. People put too much angst into trying to avoid closing cards. It happens. It's no big deal. And, in some cases, you SHOULD close a card if you aren't going to benefit from it and you want to reduce the number of cards you have outstanding for future app space... after thinking very carefully about how the card will or will not benefit you. It's not a quick decision, to be sure, but can be necessary to do so.

I've done the same with Walmart and Amazon, two store cards I have no use for, and want to save my apping for cards that do more for me (bank cards with rewards and not outrageous annual fees). Walmart gave me hives everytime I walked in the store, and I have other options for amazon, now and in the future that give me better benefits and rewards.

chwebb1 · ‎02-14-2015

@ray8806 wrote:
Back in August when I started my revolving credit journey, I got a Visa card from a CU. It was considered one of their starter cards with only a $500 limit and 14.99% APR. It was my understanding that the card will not age or increase or anything and the highest limit that they will allow for the card is $500. I'd have to go through a whole new application to get one of their regular cards. Since I've moved from that area and that CU is no longer my primary banking institution, would it be wise to close that card even though my revolving history is short?

Back in 2013, I got rid of my first credit card. It was also a CU credit card, but it had a $500 limit, and a 12.99% APR (if I remember correctly). I had to have a cosigner to even get that card! So I decided to close it after 5 years of having it. It didn't grow at all over the 5 years that I had it. The worst part about that card is you couldn't pay the bill online. You had to mail a check! Really! In 2013! So if your CU has similar stupid rules (who pays bills with checks?), I'd definitely tell you to get rid of it. It won't hurt you at all.

photo bankamericard-better-balance-rewards-credit-card-small.png

$15000 ........... $12500 ............ $11750 ............ $10000 ........... $9400 ............ $5000 ............. $5000
In the Garden until at least November 2015

kdm31091 · ‎02-14-2015

Sorry, but the poster above saying a closed account will hurt your score is not correct. It doesn't automatically hurt your score just because it's a closed account. The history is going to report the same (hopefully positive!) way, whether it's open or not.

The only difference, and part where your score can dip, is utilization -- you're removing x amount of money from your utilization calculation. This is important, but it also can be overblown. Util has no memory for month to month, so even if closing one card temporarily leaves your overall util higher, it will fix itself when you pay down the other cards. Although many here advocate keeping unused/non-useful cards open if they have no AF, I don't feel that keeping something open just because is worthwhile. Unless your util is through the roof, it's not a huge portion of your score anyway, and it doesn't remember anything month to month.

I think if something isn't useful just close it and get something that is, or garden, whatever your choice. But there's no reason to be scared to close something.