topic Re: Credit One Bank product change or cancellation? in Credit Cards

Credit One Bank product change or cancellation?

MudkipsRKooL — Thu, 07 May 2020 04:48:14 GMT

Hi, I'm an unfortune holder of Credit One Bank after losing access to Capital One card decades back. Withouth knowing it I signed up and realized it was the wrong company. Anyways it's my oldest card right now and all my newest cards right now are under 2 years so I will lose some credit score if I drop this card? Anyways I'm paying the $99 AF and I bearly use the card since I have 4 credit cards now as base. An alternative would be to ask them to cancel my card, but then get the Credit One Amex card do you guys think is possible? Also would it be a hard pull if say I do cancel and they offer the Amex cards weeks later?

Re: Credit One Bank product change or cancellation?

Mv350 — Wed, 06 May 2020 20:54:57 GMT

Cancel it, apply for 2nd actual Amex. It could be a soft pull approval.

Re: Credit One Bank product change or cancellation?

Anonymous — Wed, 06 May 2020 21:06:56 GMT

^^^ this. Lose the CreditOne card. It's crap and you have much better cards. The "Amex" they offer is in no way affiliated with Amex cards, it's simply another card CreditOne offers, it just runs on the Amex payment network. Nothing special whatsoever.

You will not lose age - it'll stay on your reports and continue to add to the age factors for up to ten years.

Re: Credit One Bank product change or cancellation?

Anonymous — Wed, 06 May 2020 21:08:40 GMT

CANCEL that Credit One ASAP and save yourself that $99 AF. The card will remain on your credit report for up to 10 years and won't hurt your credit scores.

Re: Credit One Bank product change or cancellation?

blindambition — Wed, 06 May 2020 21:23:15 GMT

#CancelCreditOne!

Re: Credit One Bank product change or cancellation?

FICOnoob2020 — Wed, 06 May 2020 22:17:01 GMT

They may offer a statement credit equal to your next annual fee when you call to cancel. At least the first time.

I am not saying you should or should not take the offer. Just know it might be an option.

Re: Credit One Bank product change or cancellation?

Anonymous — Wed, 06 May 2020 22:18:18 GMT

omg thank you for posting this! i am in the exact same boat, i have a credit one card that i do not use or want but i was scared to close bc i thought it would affect my score and credit age as it's the card i've had the longest. bye bye credit one ✌🏽

Re: Credit One Bank product change or cancellation?

Anonymous — Thu, 07 May 2020 01:34:25 GMT

@MudkipsRKooL thank you for the post and thank you all for the advice and insight.

I have been stressing about my Credit One card and the upcoming renewal this summer, as I didn't want it to tank my scores if I closed it. The card has given me a leg-up in starting to build my new file this year but now the answer is clear and I will be shutting it down.

Thanks again!!

P.S. @Anonymous welcome to the community!

Re: Credit One Bank product change or cancellation?

Aim_High — Thu, 07 May 2020 02:18:07 GMT

@Anonymous wrote:
omg thank you for posting this! i am in the exact same boat, i have a credit one card that i do not use or want but i was scared to close bc i thought it would affect my score and credit age as it's the card i've had the longest. bye bye credit one ✌🏽

Welcome to My Fico Forums, @Anonymous

Use caution applying advice on this forum to make sure it fits your situation. There are a lot of differences in credit profiles and if you miss some details it can be significant.

For example, @MudkipsRKooL has four other good major bank cards with Chase, Discover, and American Express. His other limits are $7500, $6500, $4500, and $2400. His Credit One card is the low limit at $1050. Do you have other credit cards, who are they with, how old are they, and what are the credit limits?

Another huge consideration is how much debt you are carrying, your total credit lines (utilization of credit %), and what closing a credit line will do to your overall utilization. If the card you are closing is a larger line of credit and if you're carrying debt, it is sometimes best to wait to pay off most of the debt before closing available credit lines.

Re: Credit One Bank product change or cancellation?

Anonymous — Thu, 07 May 2020 02:47:41 GMT

@Aim_High wrote:
@Anonymous wrote:
omg thank you for posting this! i am in the exact same boat, i have a credit one card that i do not use or want but i was scared to close bc i thought it would affect my score and credit age as it's the card i've had the longest. bye bye credit one ✌🏽
Welcome to My Fico Forums, @Anonymous

Use caution applying advice on this forum to make sure it fits your situation. There are a lot of differences in credit profiles and if you miss some details it can be significant.

For example, @MudkipsRKooL has four other good major bank cards with Chase, Discover, and American Express. His other limits are $7500, $6500, $4500, and $2400. His Credit One card is the low limit at $1050. Do you have other credit cards, who are they with, how old are they, and what are the credit limits?

Another huge consideration is how much debt you are carrying, your total credit lines (utilization of credit %), and what closing a credit line will do to your overall utilization. If the card you are closing is a larger line of credit and if you're carrying debt, it is sometimes best to wait to pay off most of the debt before closing available credit lines.

hi @Aim_High !

credit one is my lowest credit limit, $800 with a $0 balance. i have 0% utilization. up until last month credit one was my only credit card. i now have a 4k apple card, 6k amex, 2.6k bank of america, and 10.5k aod, which none of these have hit the credit bureaus yet. (i know apple will only hit transunion) i haven't closed my credit one yet, but i plan to do so by the end of the year, i was definitely going to wait until all these new accounts hit.

Re: Credit One Bank product change or cancellation?

Anonymous — Thu, 07 May 2020 02:50:33 GMT

thanks @Anonymous

Re: Credit One Bank product change or cancellation?

MudkipsRKooL — Thu, 07 May 2020 04:10:20 GMT

Thanks for advice, I knew I shoulda put the dates on my credit cards. The Credit One is my oldest card back in 2016, I was into bitcoins in 2009 and forgot to renew my credit union card in 2010 during the bitcoin craze and my credit cards expired on my history in 2017/2019. The rest of my cards are fairly new, only 1 year to 1 month old so I will lose AAoA? Right now it's sitting at 1 year 7 months, but prob. thinking it'll go down to 6 months AAoA? not 100% sure.

The real reason why I'm hestitent is people in the 800+ credit score, well from what I read cancelled a few cards and they are at 800-830 bucket, because they closed a few account out of the 30+ cards they have? not 100% so they have a AAoA of 10-20 years vs. 30+ years for that magical 850. Not like I'm gonna reach it anytime soon but my friend with only 2 credit cards and 10+ year history is sitting at 815-830 credit score and gives me hope lol. I mean I would gladly pay $99 for a few years just so in the future I would get a 800+ score instead of a 780 if you get what i mean.

Re: Credit One Bank product change or cancellation?

Anonymous — Thu, 07 May 2020 04:46:36 GMT

@MudkipsRKooL wrote:
Thanks for advice, I knew I shoulda put the dates on my credit cards. The Credit One is my oldest card back in 2016, I was into bitcoins in 2009 and forgot to renew my credit union card in 2010 during the bitcoin craze and my credit cards expired on my history in 2017/2019. The rest of my cards are fairly new, only 1 year to 1 month old so I will lose AAoA? Right now it's sitting at 1 year 7 months, but prob. thinking it'll go down to 6 months AAoA? not 100% sure.

The real reason why I'm hestitent is people in the 800+ credit score, well from what I read cancelled a few cards and they are at 800-830 bucket, because they closed a few account out of the 30+ cards they have? not 100% so they have a AAoA of 10-20 years vs. 30+ years for that magical 850. Not like I'm gonna reach it anytime soon but my friend with only 2 credit cards and 10+ year history is sitting at 815-830 credit score and gives me hope lol. I mean I would gladly pay $99 for a few years just so in the future I would get a 800+ score instead of a 780 if you get what i mean.

Canceling that Credit One card won't affect your AAoA. Close accounts will still count for average age for up to 10 years after they are closed. No use to paying $99 a year for a card that you have outgrown and no longer need.

Re: Credit One Bank product change or cancellation?

Anonymous — Thu, 07 May 2020 13:52:07 GMT

Credit One is owned by the Sherman Group-their main business is debt collection. They are a preditory lender and I believe anyone would live a happier life if they never invited them into it-or in your case, got them out of it.

Re: Credit One Bank product change or cancellation?

CreditCrusader — Thu, 07 May 2020 17:05:31 GMT

@Anonymous wrote:
Credit One is owned by the Sherman Group-their main business is debt collection. They are a preditory lender and I believe anyone would live a happier life if they never invited them into it-or in your case, got them out of it.

This may have been true in sum years ago, but my sister just got offered (and accepted, $2,500 limit) their Platinum Rewards Card with 5% cash back for food, gas and the like (and 1% for everything else). The AF is $95, but her first month statement saw her earning $36 in cash back already...and they post push payments and update the available credit one business day later.

In other words, they seem to be branching out with some pretty decent products (their AMEX isn't bad either). Lest we forget, Cap 1 used to offer some pretty subpar cards once upon a time...and their limits are STILL paltry, at best.

Re: Credit One Bank product change or cancellation?

Aim_High — Thu, 07 May 2020 20:40:33 GMT

@CreditCrusader wrote:
@Anonymous wrote:
Credit One is owned by the Sherman Group-their main business is debt collection. They are a preditory lender and I believe anyone would live a happier life if they never invited them into it-or in your case, got them out of it.
This may have been true in sum years ago, but my sister just got offered (and accepted, $2,500 limit) their Platinum Rewards Card with 5% cash back for food, gas and the like (and 1% for everything else). The AF is $95, but her first month statement saw her earning $36 in cash back already...and they post push payments and update the available credit one business day later.

In other words, they seem to be branching out with some pretty decent products (their AMEX isn't bad either). Lest we forget, Cap 1 used to offer some pretty subpar cards once upon a time...and their limits are STILL paltry, at best.

I've never done any business with Credit One so I can't speak to it personally but I do know they cater to the subprime market and their cards are mediocre at best. For example, one review on the Value Penguin website was pretty pointed except that the rewards comments didn't include the specific card you mentioned, the Platinum Rewards Visa. (https://www.creditonebank.com/credit-cards/platinum-rewards-visa)

"Credit One credit cards don't offer enough to consumers to justify their high fees. The cards have unclear terms, come loaded with fees, and don’t offer much cash back rewards. Before you sign up for a credit card, you can typically pull up their fees disclosure to see exactly what you can expect to pay when you sign up for an account. Credit One requires you to give them your personal information before giving you any specifics. For example, their credit cards list the annual fee as a range, $0 - $99. You will only have a $0 annual fee if you have excellent credit. On the rewards front, cardholders get just 1% cash back on gas and grocery purchases. Even the worst rewards credit cards today will typically give people 1% back on all purchases. Together, these factors are what make the Credit One Bank cards a bad deal. Even if you have bad or no credit, you can get much better terms."

"As we noted, the Credit One credit cards all come with high annual fees, unless you have an excellent credit score. If you do have a good score in the first place, you can qualify for significantly better reward cards and shouldn’t consider any of the Credit One options. On the flip side, if your credit score is less than stellar, you can still avoid annual fees by picking up cards specifically meant for people with bad credit.

The main appeal of Credit One is that they offer non-secured credit cards for people with bad credit. However, we don’t recommend exchanging a security deposit for high fees. At the end of the day, the security deposit on secured cards is money that still belongs to you. You can withdraw it when you close down your account. The money you’ll pour towards the high annual fee on Credit One cards is gone forever, and will over time be higher than most security deposits."

"Bottom Line: It’s hard to recommend the Credit One cards to anyone. No matter whether you have good or bad credit, you can find plenty of alternatives that are a significantly better value for the consumer."

That 5% card sounds like a good deal on the surface, until you look at it more carefully. Like many cards, the realistic rewards rate is much lower and the advertising can be quite misleading to actual results.

First, there's the $95 AF to allow for.
Second, the 5% is capped at $5K annually. (1% lower and $1K less than AMEX BCP.)
Third, the 5% is restricted to a few select categories (gas, grocery, internet, cable or satellite TV, mobile phone.) And as many of us know, how MCCs actually code at the pump or grocery checkout makes all the difference.
Fourth, the card only earns 1% on non-category spend or any spending over $5K annually. Combined with the annual fee, this means the only way you will ever get the full value out of this card is if you charge exactly $5K in category and not a penny more or less. Any less and the AF is dragging down your returns. Any more and your 5% in category falls to 1%.
Fifth, due to the credit profiles they are targeting, you can assume most people using this card may tend to use it as their primary or only card. (Since they may have had trouble qualifying for a "better" card.) This is really where it differs from a card like the AMEX BCP, which is similar. However, BCP targets a higher credit profile that probably has other cards available and doesn't use it for all charges.
Sixth, Credit One offers no SUB that I know of for this card, so unlike some other cards such as AMEX BCP that has a similar rewards structure, there is not any boost to the earnings rate even in the early years of the account for someone who didn't plan to keep it for the long-term.

Let's see how this pans out. The very best you can do is if you charge exactly $5K, completely in-category with no surprises, and stop there. Your rewards are ($5K x 5% = $250 - $95AF = $155/$5k spend = actual return of 3.10%. This is the absolute best you can get. While this isn't bad, it's well below that 5% and there are so many pitfalls that I imagine few people ever manage to do this. And there are many other cards that offer 3% or even higher, especially in-category. Consider our average consumer who may unsuspectingly buy groceries where they don't code as grocery such as at discount stores like Walmart. Or who, let's say, charges on average of $2K per month on the card at $24K per year. If they maximize the $5K at 5%, then put an additional $19K at 1% on the card, the actual overall annualized returns are 1.43%, so less than a typical 1.5% card like Capital One Quicksilver, AMEX Cash Rewards, Navy Federal Cash Rewards, or Wells Fargo Cash Wise. (*$155 above + $190 @ 1% = $345/24,000 = 1.43%.)

While this card is better than the 1% or less rewards that Credit One typically pays on their accounts, it's still not really even up to mainstream standards overall, IMO. Optimizing to get the full 3.1% at $5K spend is a lot of work when there are so many other options available. And if you use it out of category, you're probably better off with a 1.5% card.