Closing Cap1 secured?

[Anonymous]

Has anyone here closed their Capital One secured card? Shortly after getting it I ended up increasing deposit all the way to the $3k limit. But now that means that they cannot issue any CLIs, since it's a 3k max line. And they won't do anything about the APR.  And I've now spoken with 3 different people over the past 2-ish weeks, who have all confirmed that the card will not be unsecuring. They also won't let me decrease the security deposit (to leave room for an unsecured CLI) - I'd have to close the whole card. 

So basically I can let them sit on $2849 (since the intial deposit was $49 for a $200 line) of my money indefinitely, or close the card. Once my next paycheck comes in, I'm thinking about paying the balance off and closing the card. Is there any reason why I wouldn't want to do that? I have two other low limit cards, but they're both unsecured. The secured card was opened last December, so it doesn't really do much for my AAOA anyway. Is there really any reason to keep it open?

My gut instinct tells me to just close the account, since I can always open a new secured account with another bank (Citi/BofA) that actually graduates the card after 12/18 months. I'm just feeling nervous since it's my highest limit card and I've never closed a credit card account before! But right now it seems like a dead end card since it won't get a CLI and it won't unsecure.

Any opinions would be appreciated!

[trumpet-205]

Depending on your credit report, you may or may not need Capital One as a starter card.

Keep in mind that Citi and BofA are very conservative about their secured card. Secured CC does not mean 100% approval rate.

Wells Fargo (you need a deposit account from them), and local credit union offer better secure cards than Citi/BofA.

[Anonymous]

Well really I have two other starer cards - one from Orchard and one from Cap One. They're both unsecured. I don't have anything negative like COs or a BK on my credit report, just a thin credit file. But I realize they could still deny me for a secured card for some other reason.

In addition to not liking the idea of them sitting on my money indefinitely, I'd also like to be able to apply for one of their cash back (No Hassles) cards , but I can't due to the 2 cards limit. So if I cancel the secured card, it'll also give me the additional benefit of being able to apply for that in a few months.

The credit union suggestion is a good one though! Just hard to figure out which one to go to - too bad USAA doesn't have a secured card.

[Wolf3]

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@Anonymous wrote:

Has anyone here closed their Capital One secured card? Shortly after getting it I ended up increasing deposit all the way to the $3k limit. But now that means that they cannot issue any CLIs, since it's a 3k max line. And they won't do anything about the APR.  And I've now spoken with 3 different people over the past 2-ish weeks, who have all confirmed that the card will not be unsecuring. They also won't let me decrease the security deposit (to leave room for an unsecured CLI) - I'd have to close the whole card. 

So basically I can let them sit on $2849 (since the intial deposit was $49 for a $200 line) of my money indefinitely, or close the card. Once my next paycheck comes in, I'm thinking about paying the balance off and closing the card. Is there any reason why I wouldn't want to do that? I have two other low limit cards, but they're both unsecured. The secured card was opened last December, so it doesn't really do much for my AAOA anyway. Is there really any reason to keep it open?

My gut instinct tells me to just close the account, since I can always open a new secured account with another bank (Citi/BofA) that actually graduates the card after 12/18 months. I'm just feeling nervous since it's my highest limit card and I've never closed a credit card account before! But right now it seems like a dead end card since it won't get a CLI and it won't unsecure.

Any opinions would be appreciated!

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A high limit card allows much more flexibility in spending and utilization and many believe (including me) that it helps get higher limits in the future. 

Both Capital One (and HSBC) do not graduate, they have you apply and open a new card with them, it is not ideal but it works in the end.   

I would not close it untill you have another high limit card to replace it.  I think i would wait until you got a unsecured card you liked, rather than start a new secured account.   

[Anonymous]

That's part of what I was thinking - that having a higher limit card might help get further offers for higher limit cards. But since I haven't heard anything definitive about it, I don't know if that's actually the case or just speculation. I just don't like the idea that the card has no way of growing.

That's why I asked if it was possible to get a partial refund of my security deposit (and lower the credit line) so that it would leave balance available for unsecured CLIs, but they told me I'd have to close the account and get my deposit back, and then re-open a new account and just deposit less. And of course, get 3 inquires out of it in the process.

[Datx]

I closed my Cap One secured recently. It hit the one year mark and I heard stories that they are not planning to unsecure it, so it was closed. If I was in your situation, I would be a bit worried on closing my highest limit card. One thing I learned in my credit rebuilding journey, is to try and avoid toy limit hell. If you close this secured card that has a limit of 3K, you are left with two lower limit cards. And when you decide you want to possibly apply for a credit card (unsecured one) its possible that creditor will approve you for a card that closely matches your other two lower limit cards.

Just something to think of. BTW, USAA is not an actual CU, and they do have a secured card, but they don't offer it to all of their customers, just select ones. But joining a CU, maybe even a local one is always a good idea. Good luck!

[Datx]

Looks like Wolf beat me to it.

[Anonymous]

That's a good point, I just don't like the idea of it being such a dead-end card now.

I have a USAA membership but haven't bothered doing anything with it. I just kept reading good things about them here, and since my wife has an account (through her parents being in the Army), so I figured I might as well join. But my credit history is too limited to try to apply for their unsecured credit yet. I might take a look at a local CU, there's just so many and they all seem small. But if they can offer me a secured card that WILL graduate, they'd already be one step better than Cap One. I could just move the money over from the Cap One account to the credit union.

[Datx]

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@Anonymous wrote:

That's a good point, I just don't like the idea of it being such a dead-end card now.

I have a USAA membership but haven't bothered doing anything with it. I just kept reading good things about them here, and since my wife has an account (through her parents being in the Army), so I figured I might as well join. But my credit history is too limited to try to apply for their unsecured credit yet. I might take a look at a local CU, there's just so many and they all seem small. But if they can offer me a secured card that WILL graduate, they'd already be one step better than Cap One. I could just move the money over from the Cap One account to the credit union.

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Hmm...has your wife looked into joining NFCU? If your wife qualifies for membership (seeing that you mentioned her parents being in the army) then you could join after she joins.

[Anonymous]

I hadn't thought of that. Her mom is retired Army, her step-dad is still in (although he's a reservist). I doubt they'd want to join another bank/CU, but if I she can join without them joining first, that could work. To be honest, I'm probably enlisting in the Navy in around Q4 2011/Q1 2012 so the point will be moot in half a year anyway.

In the short-term, I don't think they offer secured cards to the public either? Last I checked my scores were hovering around 660-ish (was higher but dropped some due to higher utilization on the cards in the past few months, I presume), and I don't expect to get a prime card from NFCU until I'm at 700 again+.

I know with a thin credit file I'm not going to get approved for great cards yet, but I'd rather have something that at least has the potential to grow over time.