Consequences of closing out old secured cards and such?

[cluelessoregonguy]

Short version...took a 10 to 12 yr siesta on credit except got lousy secured card about 3 yrs ago. Secured doesn't report to Equifax so hosed there. Got Cap1 secured, Cap1 QS1 and Chase Freedom recently. Also got Fingerhut, Kays, JCrew, VS. Fingerhut I don't care about anymore. JCrew is too far away and too expensive. I'm using Kay's card and might use VS if the rewards are worth it compared to the other cards I have.

My AAoA is hosed and my oldest account (lousy secured card) is barely 3 yrs. Everything else is pretty new. How should I expect closing out the old secured card to effect me? I won't need to apply for anything else for 6 mos to 1 yr. Reports are clean finally!

I hope to have 4 main cards within a year (Freedom, Discover It, Quicksilver, Arrival). How many store cards should I have for a good mix? Do the Sears and Walmart CCs count as store cards?

If I need to get ready for a mortgage in 2 to 3 yrs would (Freedom, Discover It, Quicksilver, Arrival) + (Walmart, Sears) + paid off personal loan $1000 + paid off car loan cover my bases as far as mix and give me best chance with my low AAoA? Is there an optimal number of each type of account I should try to have?

[gdale6]

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@cluelessoregonguy wrote:

Short version...took a 10 to 12 yr siesta on credit except got lousy secured card about 3 yrs ago. Secured doesn't report to Equifax so hosed there. Got Cap1 secured, Cap1 QS1 and Chase Freedom recently. Also got Fingerhut, Kays, JCrew, VS. Fingerhut I don't care about anymore. JCrew is too far away and too expensive. I'm using Kay's card and might use VS if the rewards are worth it compared to the other cards I have.

My AAoA is hosed and my oldest account (lousy secured card) is barely 3 yrs. Everything else is pretty new. How should I expect closing out the old secured card to effect me? I won't need to apply for anything else for 6 mos to 1 yr. Reports are clean finally!

I hope to have 4 main cards within a year (Freedom, Discover It, Quicksilver, Arrival). How many store cards should I have for a good mix? Do the Sears and Walmart CCs count as store cards?

If I need to get ready for a mortgage in 2 to 3 yrs would (Freedom, Discover It, Quicksilver, Arrival) + (Walmart, Sears) + paid off personal loan $1000 + paid off car loan cover my bases as far as mix and give me best chance with my low AAoA? Is there an optimal number of each type of account I should try to have?

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Immediate effect is loss of the CL for utlization, if your cards are paid down it wont be a big deal, they will remain on file for up to 10 yrs post close. A few store cards are enough you dont need a pocket full. If Sears and WM are not bankcards (Visa etc) then they are store cards. Minimum you want are 3 bankcards and 1 store card.

[tyhollin]

Have you called Cap1 to ask for a product upgrade or if it's eligible for a "graduation" to a non secured card? That way you can hold the same credit line that's been reporting to the CRA's for the last 3 years but get better rates and perks with a better card.

I suggest not closing it out though. Your age of credit accounts for 30% of your score, if I'm not mistaken and takes YEARS to get to an exceptable length of time. Closing out this card would more than likely be a significant hit to your credit score and future loan eligibility for years to come. 

I have a 4 year old secured card that I've thought of closing to get my money back but it's just not worth it. I pay my $39 a year annual fee and use it to buy lunch once per month for the sole purpose of keeping my credit score in good standings. 

[gdale6]

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@tyhollin wrote:

Have you called Cap1 to ask for a product upgrade or if it's eligible for a "graduation" to a non secured card? That way you can hold the same credit line that's been reporting to the CRA's for the last 3 years but get better rates and perks with a better card.

I suggest not closing it out though. Your age of credit accounts for 30% of your score, if I'm not mistaken and takes YEARS to get to an exceptable length of time. Closing out this card would more than likely be a significant hit to your credit score and future loan eligibility for years to come. 

I have a 4 year old secured card that I've thought of closing to get my money back but it's just not worth it. I pay my $39 a year annual fee and use it to buy lunch once per month for the sole purpose of keeping my credit score in good standings. 

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Cap-1 does not upgrade secureds nor unsecure them, a new app for unsecured cards is required if you want one. The OPs score and access to credit would not be hit for years to come the account remains on file for up to 10 years post close so there is no immediate hit to AAoA. Once you start to obtain unsecured cards secureds are no longer necessary and can be closed out especially if they come with an AF.

[jaeproc]

As long as your utilization is still low,once you close your account your score isn't going to really change. I closed my capital one secured card account which was my oldest tradeline at the time a year and a half ago, it had 3 years of perfect on time payment history ,and I did not lose any points in my fico score it only had a 750 credit limit.  It still reports for 10 years as a positive tradeline. I believe it's a myth over closing your oldest account. I know friends and coworkers that have not experienced their credit score drop by closing their oldest accounts. So it's just not me. But it may be a ymmv type of situation!!!

[cluelessoregonguy]

Thanks for the replies! Good info. It sounds like I can pretty much close the secured cards down whenever I feel like it then. Already talked to Cap1 about their secured card and it will never go anywhere. It may get a couple of CLIs. It might even be a pain to get my QS1 upgraded. I'll probably just close the old card out while it's at 0 (it's actually an old Applied Bank card). It will never get a CLI or graduate to anything either and would be nice to get the deposit back before they go bankrupt or something.

[ezdriver]

I am about to close out three secured credit cards [$1,000 CU and two First Progressive $300 each] once I close on my house in the next few days. They have served me well and I now have unsecured ones with which to go forward enhancing my credit profile. It makes sense that closing out a zero-balance secured card won't hurt my scores ... nor do I really care. I got them for a reason and that reason is no longer valid. This is called managing one's credit profile.