topic Re: Closing a credit card with weak AAoA in Credit Cards

Closing a credit card with weak AAoA

Anonymous — Fri, 07 May 2010 22:35:01 GMT

Please offer any advice you can on my situation.

In 2006 I started opening accounts. Two accounts went south, a HSBC Bowflex CO and Cap One CO. Oddly the OC's are no longer on my credit report, both went deliq. in 2007. The two CA's that now own the accounts are on the reports and have been since 2007. One reports paid, settled. The other is unpaid. After that brief period of time of stupidity, I decided to not app for anything, and I was clueless on how to even fix it. I also acquired a collection that began reporting May 2008 for Sprint/ERC, no communication and no updates. I also got two medical collections that reported in the fall 2008 and spring 2009 that are paid. The old positives I have are auto loan opened 09-06, paid, and auto loan opened 05-07, paid.

In 2009 I decided to start cleaning up my reports. I've paid the HSBC collection, and also paid two medical collections that reported in 2009. My recent accounts I opened was a First Premier $200 limit July 2009. First Premier $300 limit Dec. 2009. Orchard Bank $300 limit March 2009. AU Navy Fed. $3500 limit March 2009. New Auto loan, hasn't hit my reports yet.

Having heard everything about First Premier now, I really want to get away from them. So far I have not had issues, aside from the fact they raised the interest rate that was to be locked in at 9.9% for one year, to 20.15%, and never notified me. I had to call them, and the rep was rude, for the first time ever. Told me they sent me something in the mail (they didn't), and that account fell in their category to raise. My $300 limit went untouched and is still at 9.9%. I have never had a huge balance. Usually sit at $0-$7., depending on when I get over there to pay the monthly fee. I've used it a few times for lunches and vonage, but have since transferred everything to Navy Fed. I just don't need it. One of my questions was if they moved me to a higher interest rate bracket, would that make other lenders reconsider me in the future? I don't really carry a balance, and the limits are too small to do anything with, really.

When I pulled my CreditKarma report card (TU FAKO 547), they said my AAoA is 0yrs 4mo. My oldest account they say is 2yrs 8mo. Equifax had pretty much the same thing on my report last month. If I were to close out the $200 First Premier from July 2009, all in $0 balance and readjusted my payments to prepare for not having that in my utilization, would that be unwise? I am still very shaky with my report history, as after accruing the nasty marks, I just left it alone. I didn't add anything new, and the only new things were collections that had slipped through the cracks -Sprint, medical. Before my credit was sitting between 540-550. Now getting the credit cards my score is sitting between 565-579. It bounces back and forth in that bracket throughout the month. Getting rid of the old stuff will get me out of the rut. But will knocking out one of the things that got me to this new bracket be a step back? I've read the stickies on Closing Credit Cards. I was just wondering if I'd still be okay even with this poor AAoA, new better accounts being added, and the poor history in the back.

Any suggestions would help. I can keep it open, but if I do, when should I get rid of it? I can't keep it forever. Thank you!!

Re: Closing a credit card with weak AAoA

Anonymous — Sat, 08 May 2010 02:50:41 GMT

The AAofA is not a reason to keep the First Premier accounts open. They still count after they are closed.

I have never heard of lenders considering the interest rate on a credit card before.

First Premiere is a money pit, and IMO is not worth the expense.

You just got a car loan, Do you need to apply for any more major credit in the near future? That might be a reason to keep them a little while longer.

If not, I think you should consider getting 1 more major credit card and/or a store card soon(without AF). Then I would drop both First Premiere cards.

You might consider getting a decent secured card, money you eventually get back, unlike the First Premier Fees.

You are in a period of rebuilding where you need to show usage over a period of time. 2 or 3 cards seems to be optimim for that.

Re: Closing a credit card with weak AAoA

Anonymous — Sat, 08 May 2010 04:01:33 GMT

Agreed. They will continue to count for 7-10 years after closure, so whether to close should not be based on AAoA. I'd be more concerned with lack of other available credit . As you get better cards, weed out the early rebuilders, both First Premier and Orchard. A store/gas card and a couple major CC (secured that will unsecure or maybe a credit union) should be sufficient. In the meantime, let the current accounts age and work on cleaning up your report.

Re: Closing a credit card with weak AAoA

Anonymous — Sat, 08 May 2010 05:36:25 GMT

I would close the two FP cards in a heartbeat. The Orchard card and the NavyFed are fine. Keep the Orchard card open - it only has a moderate AF, which is fine when you're rebuilding. I liked my Orchard for getting back on my credit feet. Also, the Orchard is a bank card, which FICO likes to see - you'll probably lose points if you close your only bank card.

You mentioned "In 2009 I decided to start cleaning up my reports. I've paid the HSBC collection, and also paid two medical collections that reported in 2009."

Are you checking out the rebuiliding my credit forums - simply paying them, unfortunately, will not help your FICO score much. And you'll probably want to HIPAA those two medical collections. That will do more to help your score than anything else.

You'll be grand with two cards. Good luck!

Re: Closing a credit card with weak AAoA

Anonymous — Sat, 08 May 2010 21:07:24 GMT

Thank you everyone for helping!

I'm not planning on anything in the near future for credit, just want to change my credit profile to reflect all positives and when that time comes, my husband and I will be looking at mortgages. That's the goal, but I'm accepting the fact that it will most likely happen in a year or two. The sooner the better, I hate the place we're at now, but something to work for, and it does take time.

I just found out, naive me, that Navy Federal's only secured card is the nRewards, which my husband has unsecured and what I'm an AU on. I think I'll go ahead and close both the First Premiers, and save up for a big deposit on a secured card from Navy Federal. Orchard is okay with me for now.

I've already paid the medical collections and despite GW's letters, they won't remove. So I am looking into starting the Hippa process on those. I'm pretty active on the rebuild forum.

Thank you all so much. I had some low confidence when thinking of what to do on the accounts. I'm very grateful for the advice and logical explanations in all your posts.

Re: Closing a credit card with weak AAoA

Anonymous — Sat, 08 May 2010 21:27:33 GMT

Excellent Plan