I believe the Venture has a $5k minimum CL, so at $3.5k I'm guessing it's a Venture One. In any case, with Capital One, like many other lenders, you may have more success with a new card than you might with CLIs. Every lender is different, but there are many stories around here of Capital One turning down CLI requests for lower limit cards then at the same time approving a new Venture for $20k or something like that. Capital One is not unique in this respect; I think Chase is also known to be more likely to give a fat new card rather than a CLI to an existing card.
Penfed is definitely a great idea as well. They have a nice travel rewards Amex if you fly a lot, and good cash or rewards on gas. They also have some good cards for BT and are pretty generous with their limits.
@Chickenpotpie wrote:pipeguy, I have never understood the love affair with CapOne, but maybe its because they don't like me much.......lol My partner has a card with them, and his CL is well above 30K. I'm even a AF on his card and STILL no love. Discover, Amex, and even Chase give me love on a regular basis so I dunno. They do work well for some people.
This is actually easy to explain... we all tend to "like" issuers that give us cards with better terms or higher credit lines. If a particular lender isn't a good 'fit' for whatever reason and they give us lower credit lines or higher rates, we don't "like" them as well. 
I can understand why you might not be "in love" with Capital One, however as you mention they do work well for many people (myself included). My own Capital One MasterCard is one of my oldest cards, and while it does leave some room for improvement it's been really solid for me... I don't have to be concerned with obnoxious 'fraud' issues when I travel out of state or make a small international internet purchase - it just works.
Capital One is also popular around here since they tend to be open to people who are rebuilding (which can be a big deal to many), and to the people who are already established they now allow folks to combine accounts, which is how many on here have obtained 'big' credit lines with them.
If Capital One is no longer a fit for you, you're wise to move on... I certainly wouldn't stay with any lender I felt I had outgrown. That being said, if it were me I would also at least consider PC'ing the card to a no-AF Quicksilver and sending it to the SD for a while before closing it out. That would give you a chance to reconsider if you later realize it can be useful after all.
Just my 2¢. 
@Chickenpotpie wrote:Happypill, correct its a venture one. I had to take a look at the face of the card to see that (tells how little use it even gets)
UncleB, CapOne does indeed work for some, but for me, nada. I tried twice. Once during the credit buildup and after. I closed the CB card because they wouldn't go beyond 900 CL, so the only one left is Venture One. And yes they can be a great credit builder card, I seriously won't deny that (can't poo-poo them on that either!). FWIW they were in my wallet for a long time but I could never get the darn thing to grow. Chase has actually been generous on my amazon card. I started with 3500 credit limit with them.
I've worked pretty hard to get my credit house in order, but I just don't feel CapOne is the company for me anymore. I only want to stay at 4 cards so that means cutting some dead wood (besides I need to stay fiscally responsible!)
+1
You've clearly put a lot of thought into this and know what's best for you... kudos for that! 
That being said, FWIW I support your decision completely. At some point you might even decide to take them for another spin, who knows? 