topic Re: Should I cancel my secured credit card? in Credit Cards

Should I cancel my secured credit card?

Anonymous — Wed, 16 Jul 2014 23:13:14 GMT

I'm an immigrant and so late last year opened a secured credit card with Merrick Bank to try and start building up my credit. Around March I received an offer from Capital One in the mail, replied, and was accepted for a normal unsecured card ($500 limit on both the Merrick and Cap One).

My question is: should I now cancel the Merrick Card (getting the $500 security deposit back would be nice) and just concentrate on the Cap One and maybe open 1-2 unsecured cards to keep building up my credit?

I was up to around 710 Experian score before I opened the Cap One. That sunk to ~650 once Cap One's hit my credit report, although my latest has climbed back up to ~680. I'm doing all the normal things to keep myself creditworthy on them (usage under $100, always paid on time, etc.) so just wondered how best to continue.

I'd appreciate any advice. Thanks!

Re: Should I cancel my secured credit card?

MT936 — Wed, 16 Jul 2014 23:07:07 GMT

Yes you should cancel it as soon as possible but make sure your total utilization will be under 20% on your other card when you cancel your secured card

Re: Should I cancel my secured credit card?

gdale6 — Wed, 16 Jul 2014 23:08:39 GMT

@Anonymous wrote:
I'm an immigrant and so late last year opened a secured credit card with Merrick Bank to try and start building up my credit. Around March I received an offer from Capital One in the mail, replied, and was accept for a normal unsecured card ($500 limit on both the Merrick and Cap One).

My question is: should I now cancel the Merrick Card (getting the $500 security deposit back would be nice) and just concentrate on the Cap One and maybe open 1-2 unsecured cards to keep building up my credit?

I was up to around 710 Experian score before I opened the Cap One. That sunk to ~650 once Cap One's hit my credit report, although my latest has climbed back up to ~680. I'm doing all the normal things to keep myself creditworthy on them (usage under $100, always paid on time, etc.) so just wondered how best to continue.

I'd appreciate any advice. Thanks!

App for 2 more unsecured bankcards prior to closing it is my 2c, the immediate effect on closing it is the loss of its CL in the util category.. I am suspecting the score you are referring to is not a real Fico. Welcome to the board

Re: Should I cancel my secured credit card?

SevenNEW — Wed, 16 Jul 2014 23:10:04 GMT

@MT936 wrote:
Yes you should cancel it as soon as possible but make sure your total utilization will be under 20% on your other card when you cancel your secured card

I disagree. I would keep it for one more year, otherwise your oldest account will be just a few months old. Once your Cap One turns one you can cancel the secured card. Hopefully you'll have a couple of more unsecured cards, so you can garden them for a few more months before trying new endeavors.

Good luck!!

Re: Should I cancel my secured credit card?

Anonymous — Wed, 16 Jul 2014 23:40:59 GMT

Thanks for the swift advice.

The scores I was quoting were my Experian scores which are provided for free by both Merrick and Capital One separately. I don't know my scores with the other bureaus.

I did actually receive a Discover card offer in the mail today; now I'm thinking I should maybe mail it in (although it's always seemed like the red-headed stepchild of credit cards). Specifically, it seems to be for a "Discover It" card.

Re: Should I cancel my secured credit card?

MT936 — Wed, 16 Jul 2014 23:46:09 GMT

@SevenNEW wrote:
@MT936 wrote:
Yes you should cancel it as soon as possible but make sure your total utilization will be under 20% on your other card when you cancel your secured card
I disagree. I would keep it for one more year, otherwise your oldest account will be just a few months old. Once your Cap One turns one you can cancel the secured card. Hopefully you'll have a couple of more unsecured cards, so you can garden them for a few more months before trying new endeavors.
Good luck!!

the canceled card will remain on his report and continue to contribute to his average age of credit for 10 years so it would be best to cancel now rather than later

Re: Should I cancel my secured credit card?

Anonymous — Thu, 17 Jul 2014 00:41:29 GMT

Really appreciate the responses.

I've turned in that Discover card offer I got today and if it gets accepted (can't see why it wouldn't) I'll probably close the Merrick card immediately. They don't even pay any interest on my $500 security deposit either (this was made very clear in their application process) but, of course, I had very few options at that time.

Re: Should I cancel my secured credit card?

SevenNEW — Thu, 17 Jul 2014 02:22:26 GMT

@MT936 wrote:
@SevenNEW wrote:
@MT936 wrote:
Yes you should cancel it as soon as possible but make sure your total utilization will be under 20% on your other card when you cancel your secured card
I disagree. I would keep it for one more year, otherwise your oldest account will be just a few months old. Once your Cap One turns one you can cancel the secured card. Hopefully you'll have a couple of more unsecured cards, so you can garden them for a few more months before trying new endeavors.
Good luck!!
the canceled card will remain on his report and continue to contribute to his average age of credit for 10 years so it would be best to cancel now rather than later

True, MT936. I was just thinking in terms of the case in which a manual review is done and they look at the active cards.

Congratulations to the OP for the success with Discover. That will turn a page. I agree that at this point you can close the secured card and garden the new TLs.