topic Re: Closing secured Credit Card in Rebuilding Your Credit

Closing secured Credit Card

Sadie5150 — Thu, 18 Mar 2021 17:24:17 GMT

I opened a Citibank secured card back in 10/2018 with a $1000 cl. In that same month I was able to get 2 unsecured cards as well. One with Cap 1 quicksilver 1 with a CL of $3000 and a Navy Federal with $2000 CL. I've also established 3 other unsecured cards with higher limits since then. For whatever reason, Citi just sent me a "annual update" stating I don't qualify for an "unsecured" account.

Question is: If I close this account all together, will it hurt my credit score? Balance on it $12.99 as I have my re-occurring Netflix charged there each month.

thanks!

MyFICO scores as of today

EX: 698

EQ: 697

TU: 802. They deleted my last baddie early and others will delete this September

Re: Closing secured Credit Card

simplegirl — Thu, 18 Mar 2021 18:07:13 GMT

I'm having the same problem with my citi secured card but I haven't gotten my second annual review yet. Anyways if you close the card with a zero balance you will still have the age of the card from 10 years after closure date.

Re: Closing secured Credit Card

Anonymous — Thu, 18 Mar 2021 20:28:07 GMT

As long as you have low utilization on your other cards and losing that $1000 won't drive you over a usage threshold, it should have no impact on your scores.

Re: Closing secured Credit Card

Sadie5150 — Thu, 18 Mar 2021 22:19:41 GMT

@Anonymous

Thanks. I'm less than 5% usage on my other cards. If citi doesn't want to release my deposit after 2 years of perfect payment history and paying off by each cycle, I don't want the card anymore.

Re: Closing secured Credit Card

Sadie5150 — Thu, 18 Mar 2021 22:22:09 GMT

@simplegirl

That's interesting. So, the only part that would affect my credit is the impact it could have on my usage with my other cards? I was thinking it had more to do with the age of accounts.

Re: Closing secured Credit Card

Anonymous — Thu, 18 Mar 2021 22:52:12 GMT

Nope, a closed account will stay on your reports for up to ten years. It will continue to contribute to aging factors until it drops off.

I agree very much with your sentiment about Citi too.

Re: Closing secured Credit Card

morethan20yaks — Fri, 19 Mar 2021 12:53:22 GMT

~~It may not effect your scores for the next year or two, but from 3-10 years it will drag down your average age more and more.~~ I believe if I were in your position, and I could afford it, I'd keep the card and pester them quarterly.

Re: Closing secured Credit Card

Anonymous — Fri, 19 Mar 2021 08:48:31 GMT

@morethan20yaks wrote:
It may not effect your scores for the next year or two, but from 3-10 years it will drag down your average age more and more. I believe if I were in your position, and I could afford it, I'd keep the card and pester them quarterly.

I'm thinking that, too. Take a look in the Backdoor Numbers thread https://ficoforums.myfico.com/t5/Credit-Card-Applications/Backdoor-Numbers/m-p/408066

There's no Retention Number cited there for Citi, however, see if there is one. Talk with Account Retention. See what they can/will do and also what's the deal. What do they want? Account Retention might graduate your card or tell you precisely how many more months to convert. 🙏🏻☘️

Re: Closing secured Credit Card

Anonymous — Fri, 19 Mar 2021 11:32:00 GMT

@morethan20yaks wrote:
It may not effect your scores for the next year or two, but from 3-10 years it will drag down your average age more and more. I believe if I were in your position, and I could afford it, I'd keep the card and pester them quarterly.

Not sure what you mean by this. If OP closes her card, it'll continue to age upward as long as it's on her reports. No account that's present, open or closed, will stop aging or stop adding its age to the average of all accounts. If it's closed today at, say, two years of age, and it stays on the reports the full ten years, when it does fall off it'll have an age of twelve years. The hit will be mitigated if OP has other tradelines near that age. If the next oldest at that time is ten years old, then OP's AoOA drops by two years, and her AAoA falls by some fraction of two years. Combine that with the fact that age itself is a relatively minor scoring factor, and the score hit will be minimal. It'll also happen only when the account falls off, not before.

Re: Closing secured Credit Card

morethan20yaks — Fri, 19 Mar 2021 12:57:42 GMT

@Anonymous wrote:
@morethan20yaks wrote:
It may not effect your scores for the next year or two, but from 3-10 years it will drag down your average age more and more. I believe if I were in your position, and I could afford it, I'd keep the card and pester them quarterly.
Not sure what you mean by this. If OP closes her card, it'll continue to age upward as long as it's on her reports. No account that's present, open or closed, will stop aging or stop adding its age to the average of all accounts. If it's closed today at, say, two years of age, and it stays on the reports the full ten years, when it does fall off it'll have an age of twelve years.

I was misinformed. I checked a closed account on my own report, and you are right.

Well that's good news. I edited my post to remove misinformation