How bad is Credit One?

[HeavenOhio]

Between your two accounts, there's two days difference in account age. No need to worry about that.

I'd close Credit One and move on. Don't let them use scare tactics, such as telling you that closing will negatively affect your score. Stand your ground.

[Anonymous]

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@HeavenOhio wrote:

Between your two accounts, there's two days difference in account age. No need to worry about that.

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Thanks for pointing out. Didn't think that through.

[Anonymous]

Wow, you guys are awesome. I didn't think I'll get that many great responses in such a short time. I guess I'm going to cancel the credit card. It really doesn't make sense to have a second one with a fee (and bad reviews) if I have one with no fee on the way. I think I was just worried that it might negatively affect my credit score but I feel like the chances of a bad experiences and getting charged any kind of fees are just too high.

And yes, from now on I pay better attention to what I'm applying for

[Adkins]

The only ding to your credit score will be the hard pull they did for the card, which probably cost just a few points anyway. You'll recover from the point loss fairly quickly as you start using the other card responsibly.

[Anonymous]

You are just starting out, so learning is a key priority. Here area  couple of things you should be aware of. The general principle is: people with bad credit are targets of unscrupulous lenders. People with no credit are targets for scrupulous lenders but not high CLs. A couple of terms you should become aware of:

FEE HARVESTER CARD: This type of care is for people who don't know how to add or subtract. A typical Fee Harvester Card will charge a $79 Annual Fee, a $10 monthly fee and who know how much in other fees, typically by giving you a #400 CL then subtracting the fees, so a $300 CL gives you $101 in actual useable credit ($300 minus the $79 Annual Fee and minus $120 in the first years' Monthly Fees). Go a penny over the limit and watch the mountain of fees come sliding down.

TOY CARD: THis is a credit card with a small CL. Hate to say it, but that's what you will get when starting out. Your goal is to get periodic CLI's so the Toy Card graduates to a Useful Card (meaning you don't reach your useful credit limit on a tank of gasoline).

USEFUL CREDIT LIMIT: Figure 8-9% of your actual Credit Limit. That is the "sweet spot" for credit reporting and maximum points on your credit score. Go above that percentage at your own risk. That's why a Toy Card with a CL of $500 isn't useful much beyond buying a tank of gasoline.

Your goal when starting out is to NOT get Fee Harvester cards - you may need to get Secured Cards, but only get Secured Cards that can graduate to Unsecured cards and then get CLIs to get out of the Toy Card category.

[Gidgetmom]

I had the Credit One card without a grace period and 24.99% interest.  Applied for it before I found this forum.  Everything you have read here is true.  They are fee harvesters and actually wanted to charge me $19.99 for my first credit line increase of $200.

Knowing what I know now....I never would have submitted the application.  I recommend closing the card.  

If you don't have a credit file or score, I have read that it takes six months of credit history for Fico to generate a score for you.  You can expect the Capital One card to take more than a month to report to the credit bureaus.  I want to say it was two months before my first Cap One reported to the bureaus.

I suggest googling "credit card prequalify".  Look for major banks.   If you are not familiar with good banks in the US, please ask.  It does not hurt your credit to see if you are prequalified.  If you are prequalied, look for a single APR.  In my experience, this has been a solid offer of credit.  If it comes back with a range of APR's ( i.e. 13.99% - 24.99%) it is not. (More like an advertisement)  Please read all the "terms and conditions" and "offers and rates" before applying.  After my Credit One debacle, I learned to read it all! 

A prequalify/preapproval is no guarantee that you will get the card.  There is always a chance you will be denied.  The chance for approval is a little higher with a single APR with the prequal/preapproval.

Save your inquiries for a good preapproval and later for the cards you really want.  A young/thin credit file has a harder time getting better cards if you are applying all around town.

You found a great resource in this MyFICO family.  It truly starts to feel like a family over time. I may not always post, but can't go a day without checking in my peeps here!

Best of luck to ya and welcome to the family.

[Anonymous]

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@Anonymous wrote:

Call and cancel it without activating it Sarah. 

There is zero value (that I can think of) in that card if you have a Capital One on the way. It would also shorten your average credit age, which is bad for your credit score. Probably not in a major way for you, but there would be a bit of a lower score.

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Does Credit One really work that way?   With the vast majority of cards, the account is created at approval time, whether you activate it or not.   As others have pointed it, it hardly matters in this case because the cards are nearly the same age, but in general I don't think not activating and cancelling has any gain.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Call and cancel it without activating it Sarah. 

There is zero value (that I can think of) in that card if you have a Capital One on the way. It would also shorten your average credit age, which is bad for your credit score. Probably not in a major way for you, but there would be a bit of a lower score.

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Does Credit One really work that way?   With the vast majority of cards, the account is created at approval time, whether you activate it or not.   As others have pointed it, it hardly matters in this case because the cards are nearly the same age, but in general I don't think not activating and cancelling has any gain.

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I already adressed this in a follow up. And the gain is NOT paying an annual fee.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Call and cancel it without activating it Sarah. 

There is zero value (that I can think of) in that card if you have a Capital One on the way. It would also shorten your average credit age, which is bad for your credit score. Probably not in a major way for you, but there would be a bit of a lower score.

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Does Credit One really work that way?   With the vast majority of cards, the account is created at approval time, whether you activate it or not.   As others have pointed it, it hardly matters in this case because the cards are nearly the same age, but in general I don't think not activating and cancelling has any gain.

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I already adressed this in a follow up. And the gain is NOT paying an annual fee.

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Yes, obviously not paying the AF is a gain, but that wasn't my point.  Your followup was about it not making much difference in this case due to the similarly aged accounts.   I am asking (not just you now) if not activating the card really prevents the hit to AAoA in general.   I don't think it does, but want to see if that is the case.

[K-in-Boston]

I think the account will report whether activated or not but Average Age of Accounts is quite literally 0 months so not really harm done and it may actually help to pad the average age later on if there aren't a ton of new accounts opened.  I completely agree with all of the other posters that suggested just closing it and moving on.  If you can afford to do it, I would also open up secured accounts with Bank of America and Discover.  Both of those will grow up to be real credit cards. 

You may also want to decide if opening a Share Secured Loan with a credit union is right for you.  Credit mix is an important factor in credit scores and having an open installment loan in good standing could do wonders for a completely new credit file, getting those secured cards unsecured quickly.  Essentially, you put money in a savings account, take out a loan against it, immediately pay back almost all of it, then just make a payment every now and again and your total cost of the loan over 5 years works out to a few cups of coffee.