topic Re: should i just close it? in Credit Cards

should i just close it?

krazy — Wed, 29 Jul 2009 04:56:58 GMT

Hi everyone,

So i applied for a new discover credit card and I found out that they gave me a 18%interest rate. I have a decent 770-780 credit score and usually get offers of 9-14%(I have 3 CC within that range). Honestly, I was hoping for the 11% rate but they gave me there highest. Should I just cancel it? I read it will be a bump in my score for a while but it will eventually go away. Any advice would be helpful. Thanks in advance.

Re: should i just close it?

FocusOnFICO — Wed, 29 Jul 2009 05:24:50 GMT

Krazy---welcome to the forums!

It depends on your goals. If you are a PIF cardholder, the interest rate is not an issue. Over time you may be able to talk them down, but there are better alternatives to carrying at even 11%.

Many posters are now writing about Addison Avenue Federal Credit Union, their good customer service, and yes---their 5.24% Visa.

You may want to check into this card. Otherwise, if your PIF, the Discover rate should not affect you.

Re: should i just close it?

Anonymous — Wed, 29 Jul 2009 05:29:18 GMT

@krazy wrote:
Hi everyone,
So i applied for a new discover credit card and I found out that they gave me a 18%interest rate. I have a decent 770-780 credit score and usually get offers of 9-14%(I have 3 CC within that range). Honestly, I was hoping for the 11% rate but they gave me there highest. Should I just cancel it? I read it will be a bump in my score for a while but it will eventually go away. Any advice would be helpful. Thanks in advance.

My guess is that you're going to see a lot of banks give higher APRs at approval in anticipation of the new credit card laws going into effect next year. I wouldn't take it personal.

If you PIF, or keep low UTIL, the APR is not significant. In addition, Discover is still one of the better cards in terms of rewards, customer service, and consistency.

Re: should i just close it?

krazy — Wed, 29 Jul 2009 05:30:44 GMT

thanks for the quick reply!

I tend to carry a balance more, as for talking interest rate down in the past I have been unsuccessful. I will definitely check out Addison Avenue federal credit union in the future but as for right now, I am still unsure of keeping it. If I were to close this recent Discover account how much will it affect my score and how long?

Re: should i just close it?

Anonymous — Wed, 29 Jul 2009 05:35:36 GMT

@krazy wrote:
thanks for the quick reply!
I tend to carry a balance more, as for talking interest rate down in the past I have been unsuccessful. I will definitely check out Addison Avenue federal credit union in the future but as for right now, I am still unsure of keeping it. If I were to close this recent Discover account how much will it affect my score and how long?

I don't see any advantage to closing the card. You've already burned an inquiry and it will show as a new account. Just curious, could you share the CL given to you?

Re: should i just close it?

krazy — Wed, 29 Jul 2009 06:10:47 GMT

I guess, there is no advantage to closing. The credit line was only 3,000 .(still student who barely works part time : / )

Re: should i just close it?

Anonymous — Wed, 29 Jul 2009 06:14:53 GMT

@krazy wrote:
I guess, there is no advantage to closing. The credit line was only 3,000 .(still student who barely works part time : / )

$3k CL from Discover for a student who barely works should be embraced, not closed. Keep it, use it, enjoy it.

Re: should i just close it?

krazy — Wed, 29 Jul 2009 06:21:02 GMT

@Anonymous wrote:
@krazy wrote:
I guess, there is no advantage to closing. The credit line was only 3,000 .(still student who barely works part time : / )
$3k CL from Discover for a student who barely works should be embraced, not closed. Keep it, use it, enjoy it.

This is what I am leaning towards... thanks for your input.

Re: should i just close it?

smallfry — Wed, 29 Jul 2009 09:53:33 GMT

@krazy wrote:
I guess, there is no advantage to closing. The credit line was only 3,000 .(still student who barely works part time : / )

Little income student 3K initial limit and you want to close because the interest rate is too high? The credit card companies are going to love you until they don't. Careful.

Re: should i just close it?

haulingthescoreup — Wed, 29 Jul 2009 13:01:26 GMT

Sounds like you're leaning toward keeping it, but as a general fyi, you shouldn't get a score change in either direction by closing a newly opened card. You might want to read fused's "Closing Credit Cards", linked in my siggy.

If you've had a card for a while, and you close it, and you have balances on other cards, your score might drop because your util will rise (same total balance in the numerator, smaller total credit limit in the denominator.)

I would strongly advise you to get out of the habit of carrying balances on your cards. That puts a giant bulls-eye on your accounts for banks looking to milk some extra money out of consumers. You're in their power when you owe them money, and if you read many posts here, you'll see how ugly it can get.

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.

Re: should i just close it?

Anonymous — Wed, 29 Jul 2009 16:11:48 GMT

$3k CL from Discover for a student who barely works should be embraced, not closed. Keep it, use it, enjoy it.

Yep.

Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

Re: should i just close it?

Anonymous — Wed, 29 Jul 2009 16:47:17 GMT

You got an approval and a higher CL from Discover than anyone here would have predicted.

Discover does adjust APR's down. I opened a Discover More account last summer based on a pre-app and the APR was set at 11.99%V. I also had a 0% APR for purchases promo for a while. When the promo ended APR was 9,99%V and it has remained there ever since. The lowest rate now offered for a new account is 10,99%V. If you keep your nose clean it can happen.

Maximize your rewards by using ShopDiscover.

Don't carry balances.

Don't close your Discover.

Re: should i just close it?

score_building — Wed, 29 Jul 2009 17:29:04 GMT

marinevietvet wrote:

$3k CL from Discover for a student who barely works should be embraced, not closed. Keep it, use it, enjoy it.

take care of it and it will take care of you.

3k is a generous initial CL from discover on a student card. discover is one of the most conservative lenders even when times are good.

2k to start is not uncommon from discover on a regular (non student) acct.