topic Re: Do I close my three SUBPRIME cards? in Understanding FICO® Scoring

Do I close my three SUBPRIME cards?

Anonymous — Thu, 06 Sep 2018 19:09:42 GMT

I am in the process of repairing my credit and have had a lot of success in the last few years. Most recently, I was approved for an AMEX Cash Magnet ($1000) and a Discover IT ($2000). I current have three subprime cards through Credit One ($700), Merrick Bank ($800) and Open Sky ($300). I also have one through my credit union but even though the limit is currently low at $500, it has a very low interest rate and no AF so I plan on keeping it open.

My question is: Do I close three cards and potentially take a hit on my score, or do I leave them open and continue to gain the history and AAOC? All three cards are a little over a year old.

Re: Do I close my three SUBPRIME cards?

xaximus — Thu, 06 Sep 2018 19:13:39 GMT

Personally - since you have better lenders now - I would close out the sub-prime cards. If they have no AF then keep them open, but from what I know, Credit1 definitely has one (close them), the other 2 (don't remember off the top of my head if they have AF or not). Either way, the deciding factor for me would be if they have AF or not. Keep in mind, even if you do close them, their AAoA will not drop off your CR. It shows on your report for 10 years. So the impact of closing all 3 won't hurt your AAoA.

Re: Do I close my three SUBPRIME cards?

SouthJamaica — Thu, 06 Sep 2018 21:39:25 GMT

@Anonymous wrote:
I am in the process of repairing my credit and have had a lot of success in the last few years. Most recently, I was approved for an AMEX Cash Magnet ($1000) and a Discover IT ($2000). I current have three subprime cards through Credit One ($700), Merrick Bank ($800) and Open Sky ($300). I also have one through my credit union but even though the limit is currently low at $500, it has a very low interest rate and no AF so I plan on keeping it open.

My question is: Do I close three cards and potentially take a hit on my score, or do I leave them open and continue to gain the history and AAOC? All three cards are a little over a year old.

I would close them.

But not the credit union card; no credit union card is sub-prime.

Re: Do I close my three SUBPRIME cards?

Medic981 — Thu, 06 Sep 2018 21:41:55 GMT

@xaximus wrote:
Personally - since you have better lenders now - I would close out the sub-prime cards. If they have no AF then keep them open, but from what I know, Credit1 definitely has one (close them), the other 2 (don't remember off the top of my head if they have AF or not). Either way, the deciding factor for me would be if they have AF or not. Keep in mind, even if you do close them, their AAoA will not drop off your CR. It shows on your report for 10 years. So the impact of closing all 3 won't hurt your AAoA.

+1, I could not have said this better myself!

Re: Do I close my three SUBPRIME cards?

Medic981 — Thu, 06 Sep 2018 21:43:49 GMT

@SouthJamaica wrote:
@Anonymous
But not the credit union card; no credit union card is sub-prime.

Ditto

Re: Do I close my three SUBPRIME cards?

HeavenOhio — Thu, 06 Sep 2018 23:51:39 GMT

Close Credit One and Open Sky. You'd want to close those even if it kicked in a loss of points.

You'll probably want to close Merrick at some point simply because it isn't really a long-term keeper. But there's no harm in keeping it around until the time is right. I'd think about closing it the next time you acquire a credit card.

Re: Do I close my three SUBPRIME cards?

Anonymous — Fri, 07 Sep 2018 12:17:46 GMT

I agree with the other folks that the AF would be the ultimate deciding factor.

But one thing to observe is the the AF on a particular card might not be due for another 7, 8, or even 10 months. In that case I would avoid closing so many cards that it brings my total number of open cards to less than three. That's another principle that can be used in making decision about CC closure.

It's possible (based on reading the initial post) that our OP currently has only two cards he likes.

Re: Do I close my three SUBPRIME cards?

Anonymous — Fri, 07 Sep 2018 20:03:34 GMT

I have three cards that I like and want to keep open. The other three are subprime. Do lenders looks upon me negatively for having these subprime cards? I want to close them, but also worry about the possible repercussions of closing three open accounts in good standing. Thoughts?

Re: Do I close my three SUBPRIME cards?

FireMedic1 — Fri, 07 Sep 2018 20:20:38 GMT

They (The Banks) will look differently with secured cards more than subprime cards. You have prime cards now. Congrats! Tell Credit One and Open Sky thanks for the start. Its time to cross the finish line and close them. Especially if you have fees associated with them. As you gain another prime. Then you can decide to keep the Merrick or shut it down. Stay at 3 or more cards. JMHO. Good Luck.

Re: Do I close my three SUBPRIME cards?

Cred4All — Sat, 08 Sep 2018 17:52:31 GMT

Not much more I can input here as everyone else has covered it great already. Remember that, based on previous posters on this board, when you call to cancel a lender such as Credit One, they'll most likely offer you a sweet temporary deal (Such as no AF for 6 months) but be strong, and close it with a thank you.

Also, based on the SL you just acquired (Congrats!) Even if you cancel these sub-prime cards, the new SL's are still higher when added together than the credit line you're closing so the impact will hopefully be minimal if any.

Re: Do I close my three SUBPRIME cards?

AndySoCal — Wed, 12 Sep 2018 01:29:59 GMT

With the credit union credit card see if you could product change to another one of there credit cards. If you can product change see if they can give a credit limit increase with out a hard pull.

Re: Do I close my three SUBPRIME cards?

Anonymous — Wed, 12 Sep 2018 05:04:38 GMT

That is a great idea! Thank you!