2 low limit cards..approved for 3rd. Is it a good idea?

[gettingsmarter]

I have 2 capial one credit cards first with 750 limit opened in June 2010 (started at 500 then increased a few months later as part of their "steps" program) - the second is capital one also, was opened in September 2010 with $500 limit about to become $750 in March. So after months of getting weekly offers from Orchard bank in my mailbox, I took the bait and applied nline and was approved for a low $300 limit. Before I activate it, should I even bother? Will it be a good thing score wise in the future as far as revolving accounts or should I just keep working with my 2 capital one cards. One of the capital one card will be a year in just a few months.. And I have seen my scores go up slowly. Any and all advice is greatly appreciated.

[JayRizzo]

I would have gardened the the 2 Capital One accounts for a while because they are still new.  Geeeez!!!  An Orchard Offer?!?  That's like taking 3 steps back when you were ahead. 

I'm finding more and more people are doing this knee-jerk reaction, THEN come to the forum and ask if they did the right thing?!?  I'm still waiting for someone to get online and say they've searched the forum for existing threads on the subject and weighed the Pros and Cons of the offer and based on their findings, blah blah blah.  But truly, I'm starting to feel this forum isn't really serving it's purpose to educate consumers if the majority of posters are reactive first, then come to the forums for comforting.  Just my opinion.

[Anonymous]

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@JayRizzo wrote:

I would have gardened the the 2 Capital One accounts for a while because they are still new.  Geeeez!!!  An Orchard Offer?!?  That's like taking 3 steps back when you were ahead. 

I'm finding more and more people are doing this knee-jerk reaction, THEN come to the forum and ask if they did the right thing?!?  I'm still waiting for someone to get online and say they've searched the forum for existing threads on the subject and weighed the Pros and Cons of the offer and based on their findings, blah blah blah.  But truly, I'm starting to feel this forum isn't really serving it's purpose to educate consumers if the majority of posters are reactive first, then come to the forums for comforting.  Just my opinion.

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Well, FWIW, I have been making recent decisions based upon info found here. For example, I've learned about the effects of inquiries and AAoA. So, when I decided that I didn't want to keep my DH on as an AU on my FP card because they were going to hit me with yet another fee, I sat him down and told him that it was time to get a card under his own name. In the past, I would have applied for another account and put him on as an AU. Bad idea, so I didn't do it. But, I wised up from reading about such things here. I'm in serious gardening mode right now... I learned about that concept from HERE.

I can understand how the OP feels. When you're used to getting rejected, and someone suddenly offers you a card, it can feel like such a boost that it's hard to resist the offer. The OP will do just fine with the three cards, and now most likely realizes that it's time to stop and let them grow. He or she wouldn't have asked if the light bulb hadn't gone off. It might have been better if this had happened before accepting the Orchard Bank card, but in the end it should work out. No need to make the OP feel bad about it... He or she may come to feel uncomfortable asking future questions. Many of us, including myself, have made mistakes with our credit, and I will say that I'm grateful to have a place where I can come and ask questions and learn. Even so, learning doesn't mean that one can't make a few mistakes along the way.

[JaseT]

I would'nt open the HSBC/Orchard account. When I was rebuilding last spring/summer, I opened up an HSBC/Household card and regret it now. $300 limit that doesn't increase and an AF. Turd of a card, for sure.

[Anonymous]

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@gettingsmarter wrote:
I have 2 capial one credit cards first with 750 limit opened in June 2010 (started at 500 then increased a few months later as part of their "steps" program) - the second is capital one also, was opened in September 2010 with $500 limit about to become $750 in March. So after months of getting weekly offers from Orchard bank in my mailbox, I took the bait and applied nline and was approved for a low $300 limit. Before I activate it, should I even bother? Will it be a good thing score wise in the future as far as revolving accounts or should I just keep working with my 2 capital one cards. One of the capital one card will be a year in just a few months.. And I have seen my scores go up slowly. Any and all advice is greatly appreciated.

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You've already taken a hit from the inquiry, so you've already lowered your score a bit. By activating the card the account will report to the CRAs and will lower your AAoA. Since you started less than a year ago, it sounds like it's already pretty low. Do you have an AF with this card? If so, is it worth it to you to keep it? You may just want to cancel it before you use it so that you don't have to pay the AF and lower your AAoA.

If you HAVE already started to use the card, you might as well keep it, as you're already on the hook for the AF and the account will report to the CRAs. Even with the low limit, you could still use it once a month for a tank of gas.

Those are just my thoughts on the matter.

[haulingthescoreup]

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@gettingsmarter wrote:
I have 2 capial one credit cards first with 750 limit opened in June 2010 (started at 500 then increased a few months later as part of their "steps" program) - the second is capital one also, was opened in September 2010 with $500 limit about to become $750 in March. So after months of getting weekly offers from Orchard bank in my mailbox, I took the bait and applied nline and was approved for a low $300 limit. Before I activate it, should I even bother? Will it be a good thing score wise in the future as far as revolving accounts or should I just keep working with my 2 capital one cards. One of the capital one card will be a year in just a few months.. And I have seen my scores go up slowly. Any and all advice is greatly appreciated.

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Well, you're stuck with it on your reports, whether you activate it or not. If there's a fee, I might not bother to activate. Otherwise, it's your choice, but it will probably be stuck at $300 for a long, long time.

When you're evaluating your credit opportunities, keep an eye on the calendar. Your first card was opened in June 2010 and the second in September 2010.

If I were you, I wouldn't apply for (or accept) anything more until June-July 2011 at the earliest, and maybe until September-October 2011.

You need to establish a track record of good history, and the longer it is, the more ready better lenders will be to approve you. Right now, you're a building/ rebuilder, so that's probably all you're going to get for now. If you hold off until October, when both cards have reported for a solid year, I think you'll look a lot more attractive to lenders. (Plus your FICO's will be higher.) You might want to research credit unions in your area in the interim, as CU's are generally more generous with initial CL's.

Step back and do some gardening. You've got time, and you'll come out a lot better in the end.

[haulingthescoreup]

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@Anonymous wrote:

You've already taken a hit from the inquiry, so you've already lowered your score a bit. By activating the card the account will report to the CRAs and will lower your AAoA. Since you started less than a year ago, it sounds like it's already pretty low. Do you have an AF with this card? If so, is it worth it to you to keep it? You may just want to cancel it before you use it so that you don't have to pay the AF and lower your AAoA.

If you HAVE already started to use the card, you might as well keep it, as you're already on the hook for the AF and the account will report to the CRAs. Even with the low limit, you could still use it once a month for a tank of gas.

Those are just my thoughts on the matter.

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In almost all cases, accounts are going to report, whether you activate or not. There was discussion about adding a "buyer's remorse" provision to the Credit Card ACT, so that new unactivated accounts wouldn't report, but AFAIK this didn't make it into law.

[Anonymous]

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@haulingthescoreup wrote:

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@Anonymous wrote:

You've already taken a hit from the inquiry, so you've already lowered your score a bit. By activating the card the account will report to the CRAs and will lower your AAoA. Since you started less than a year ago, it sounds like it's already pretty low. Do you have an AF with this card? If so, is it worth it to you to keep it? You may just want to cancel it before you use it so that you don't have to pay the AF and lower your AAoA.

If you HAVE already started to use the card, you might as well keep it, as you're already on the hook for the AF and the account will report to the CRAs. Even with the low limit, you could still use it once a month for a tank of gas.

Those are just my thoughts on the matter.

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In almost all cases, accounts are going to report, whether you activate or not. There was discussion about adding a "buyer's remorse" provision to the Credit Card ACT, so that new unactivated accounts wouldn't report, but AFAIK this didn't make it into law.

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Ah, I wasn't aware of this. Another new thing that I've learned here. That's too bad, though. If you apply for a card and you don't like the terms, I assumed that you had the right to decline it and go on your way. It almost sounds as if you're entering into a contract without being allowed to review it first. After all, you don't know what CL and APR you'll be offered until AFTER you apply. I thought that activating and using the card constituted your final, binding agreement to that contract. I don't understand why it should be reported to the CRAs if you have decided not to agree to the terms and accept the card. Somehow, this doesn't seem right to me, and I wish that the law would address it.

[Anonymous]

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@gettingsmarter wrote:
I have 2 capial one credit cards first with 750 limit opened in June 2010 (started at 500 then increased a few months later as part of their "steps" program) - the second is capital one also, was opened in September 2010 with $500 limit about to become $750 in March. So after months of getting weekly offers from Orchard bank in my mailbox, I took the bait and applied nline and was approved for a low $300 limit. Before I activate it, should I even bother? Will it be a good thing score wise in the future as far as revolving accounts or should I just keep working with my 2 capital one cards. One of the capital one card will be a year in just a few months.. And I have seen my scores go up slowly. Any and all advice is greatly appreciated.

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The account is already open, so not activating the card does nothing. 

This is a OK move.  Developing a positive relationship with HSBC (who owns Orchard) will help you get one of their better cards in the future.   I suggest you activate the card and use it along with the Capital One cards.    I would wait about a year for the next application when your scores should be better.   Pick one you want for the long term. 

[Anonymous]

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@JayRizzo wrote:

I would have gardened the the 2 Capital One accounts for a while because they are still new.  Geeeez!!!  An Orchard Offer?!?  That's like taking 3 steps back when you were ahead. 

I'm finding more and more people are doing this knee-jerk reaction, THEN come to the forum and ask if they did the right thing?!?  I'm still waiting for someone to get online and say they've searched the forum for existing threads on the subject and weighed the Pros and Cons of the offer and based on their findings, blah blah blah.  But truly, I'm starting to feel this forum isn't really serving it's purpose to educate consumers if the majority of posters are reactive first, then come to the forums for comforting.  Just my opinion.

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You, on the other hand, like to pass off rumor and hearsay as fact.  I find that much more annoying!