topic Keep or close low credit line cards in Rebuilding Your Credit

Keep or close low credit line cards

Saintsfan82 — Fri, 17 Jul 2015 18:44:08 GMT

I have been rebounding from a BK in June of 2013 and I have opened 3 low credit line, higher interest rate and AF cards. Through on time payments and keeping a low utilization with my 3 Capital One cards, I now have limits of 1250.00 on my secured card, 2,300.00 on my Sony card and 1750.00 on my Quicksilver One card. My question is, should I pay off my sub prime cards and sockdrawer them then cancel them before the AF hits or just go ahead and pay them off and cancel them now? The combined limits between the 3 cards is 1,500.

Re: Keep or close low credit line cards

crrredit — Fri, 17 Jul 2015 19:41:41 GMT

I'm at the point where I'm replacing secured cards with unsecured cards with higher Cls. I'm also investigating whether I should close the secured cards now or wait. The general advice I'm receiving and discovering here on the boards is to maintain the cards for a year, then, if my utilization is very low, go ahead and close them. If you have balances on your new cards, closing the smaller limit cards might affect your overall utilization rate. So the goal would be to have just one of the new cards reporting less than 10% balance and the other new cards reporting a $0 balance, before closing your smaller limit cards. If you do that, the actual closing of the cards will not be a negative on your FICO score.

Re: Keep or close low credit line cards

Saintsfan82 — Fri, 17 Jul 2015 19:49:07 GMT

I'm in the same boat with my one secured card. I have it payed down to almost a zero balance and I'm trying to figure out if I should close it too. But if I do close it, it will take 1250.00 from my total available credit and it is my oldest credit line since my BK was discharged.

Re: Keep or close low credit line cards

RobertEG — Fri, 17 Jul 2015 23:37:57 GMT

Closed accounts are still included in calculation of your average age of accounts, so closing will not necessarily lower your AAoA.

However, the consumer has no control over the creditor deciding to delete the entire account once it is closed, so it could result in loss of the age of the account.

In my opinion, $$ in pocket trumps a few credti scoring points, and I would close an account to avoid an annual fee.

Re: Keep or close low credit line cards

SunriseEarth — Sat, 18 Jul 2015 00:51:16 GMT

@Saintsfan82 wrote:
I have been rebounding from a BK in June of 2013 and I have opened 3 low credit line, higher interest rate and AF cards. Through on time payments and keeping a low utilization with my 3 Capital One cards, I now have limits of 1250.00 on my secured card, 2,300.00 on my Sony card and 1750.00 on my Quicksilver One card. My question is, should I pay off my sub prime cards and sockdrawer them then cancel them before the AF hits or just go ahead and pay them off and cancel them now? The combined limits between the 3 cards is 1,500.

I vote for choice #1. Since you already paid the AF, then you may as well get the use out of them. Pay them off, SD them, and close before the AFs hit again. In regards to scoring, it's ideal to have zero balances on at least half of your CCs.

Re: Keep or close low credit line cards

Saintsfan82 — Sat, 18 Jul 2015 01:05:38 GMT

Thanks for all the good advice! I think I'm going to SD them until the AF hits, then I'll cancel them.

Re: Keep or close low credit line cards

padme — Sat, 18 Jul 2015 01:28:36 GMT

Post BK7 <2years ago, opened CreditOne +Merrick Secured, closed them before 12 months, got Barclays for 1900, plus Discover for $800, plus 3x Capitol ones for $28K, scores in toilet now @580 Fico, CU all under $300 max per card... 16+ INQ's, just keep hitting Preq sites and such! good luck