Received card with very low credit limit: can I minimize negative impact to credit score?

[Anonymous]

Hello all,

I have a high balance-to-limit ratio, and I recently opened some new accounts to transfer the balances to lower interest cards.

One of the cards was approved with a credit limit of only $250.  This impacted my credit score by lowering the average age of my accounts while barely increasing the overall limit of all of my cards combined.  If I had known that I would have been approved at such a low limit, I would not have accepted the offer.

Is there a way to minimize the negative impact to my credit score?  I called the credit card company about closing the account, and they said that as long as I have never used the card, closing the account would not reduce my score, although it would still show on my credit history.

I've also thought about asking them to increase the credit limit on the card, but of course that puts a hard inquiry on my credit history.

Does anybody have any thoughts or advice about the best way to proceed?

Thank you!

[Burned2manybridgesB4]

List what you've got,....balance/limits.

[SunriseEarth]

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@Anonymous wrote:

Hello all,

I have a high balance-to-limit ratio, and I recently opened some new accounts to transfer the balances to lower interest cards.

One of the cards was approved with a credit limit of only $250.  This impacted my credit score by lowering the average age of my accounts while barely increasing the overall limit of all of my cards combined.  If I had known that I would have been approved at such a low limit, I would not have accepted the offer.

Is there a way to minimize the negative impact to my credit score?  I called the credit card company about closing the account, and they said that as long as I have never used the card, closing the account would not reduce my score, although it would still show on my credit history.

I've also thought about asking them to increase the credit limit on the card, but of course that puts a hard inquiry on my credit history.

Does anybody have any thoughts or advice about the best way to proceed?

Thank you!

---

Who is your card issuer?   it might not be HP.   

And closing the card won't make it go away.   It will be on your CRs for ~10 years.  

[Anonymous]

Hi Burned & SunriseEarth,

Thank you very much for your replies!

Here are my accounts.  The most recent one that I mentioned above is the Barclaycard at the bottom of the list:

Account: Balance/Credit Limit (% Utilization)

Patelco Visa Platinum: $12,753/$15,000 (85%)

Chase Slate Visa: $7,405.12/$14,100 (53%)

Bank of America Platinum Plus Visa: $3,622.99/$4,000 (91%)

Citi Hilton Hhonors Visa Signature: $1,509.12/$4,410 (34%)

Chase Freedom Visa: $0/$5,500 (0%)

American Express Blue: $0/$5,100 (0%)

Discover it: $0/$1,500 (0%)

Barclaycard Rewards World Mastercard: $0/$250 (0%)

Total: $25,290.23/$49,860 (51%)

Also, if in case some additional information is relevant, I have a student loan of $22,878.78, and  my credit scores are Equifax 676, TransUnion 678, and FICO 691.

Do you think it might be better to (1) close the Barclaycard account without ever using it, if that will restore my credit score to where it was before it was issued, as the bank seemed to be saying (although I honestly don't know how much of a negative impact it had on my overall score, since I didn't check my score first); (2) ask them to raise my credit limit after I pay my balances down further (assuming that will put a hard pull on my credit report); (3) just wait it out while I pay everything down; (4) something else?

Thank you again for your help!

[SunriseEarth]

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@Anonymous wrote:

Hi Burned & SunriseEarth,

Thank you very much for your replies!

Here are my accounts.  The most recent one that I mentioned above is the Barclaycard at the bottom of the list:

Account: Balance/Credit Limit (% Utilization)

Patelco Visa Platinum: $12,753/$15,000 (85%)

Chase Slate Visa: $7,405.12/$14,100 (53%)

Bank of America Platinum Plus Visa: $3,622.99/$4,000 (91%)

Citi Hilton Hhonors Visa Signature: $1,509.12/$4,410 (34%)

Chase Freedom Visa: $0/$5,500 (0%)

American Express Blue: $0/$5,100 (0%)

Discover it: $0/$1,500 (0%)

Barclaycard Rewards World Mastercard: $0/$250 (0%)

Total: $25,290.23/$49,860 (51%)

Also, if in case some additional information is relevant, I have a student loan of $22,878.78, and  my credit scores are Equifax 676, TransUnion 678, and FICO 691.

Do you think it might be better to (1) close the Barclaycard account without ever using it, if that will restore my credit score to where it was before it was issued, as the bank seemed to be saying (although I honestly don't know how much of a negative impact it had on my overall score, since I didn't check my score first); (2) ask them to raise my credit limit after I pay my balances down further (assuming that will put a hard pull on my credit report); (3) just wait it out while I pay everything down; (4) something else?

Thank you again for your help!

---

I vote for #3.   Closing the Barclay account won't make it go away.   It will continue to be factored into your AAoA for ~10 years.   If the card isn't usable, SD it.  AFAIK, Barclay won't budge for 6 months, anyway, and you can use the zero balances.    And yes, continue to work the balances down across all of your accounts, especially that BofA one, since it's practically maxed out (in FICO terms).  

[Pway]

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@Anonymous wrote:

Hi Burned & SunriseEarth,

Thank you very much for your replies!

Here are my accounts.  The most recent one that I mentioned above is the Barclaycard at the bottom of the list:

Account: Balance/Credit Limit (% Utilization)

Patelco Visa Platinum: $12,753/$15,000 (85%)

Chase Slate Visa: $7,405.12/$14,100 (53%)

Bank of America Platinum Plus Visa: $3,622.99/$4,000 (91%)

Citi Hilton Hhonors Visa Signature: $1,509.12/$4,410 (34%)

Chase Freedom Visa: $0/$5,500 (0%)

American Express Blue: $0/$5,100 (0%)

Discover it: $0/$1,500 (0%)

Barclaycard Rewards World Mastercard: $0/$250 (0%)

Total: $25,290.23/$49,860 (51%)

Also, if in case some additional information is relevant, I have a student loan of $22,878.78, and  my credit scores are Equifax 676, TransUnion 678, and FICO 691.

Do you think it might be better to (1) close the Barclaycard account without ever using it, if that will restore my credit score to where it was before it was issued, as the bank seemed to be saying (although I honestly don't know how much of a negative impact it had on my overall score, since I didn't check my score first); (2) ask them to raise my credit limit after I pay my balances down further (assuming that will put a hard pull on my credit report); (3) just wait it out while I pay everything down; (4) something else? You have took the hit already for opening the card.  The low limit could of came from the high utilization of your cards. I would work on paying those cards down a lot. 

Thank you again for your help!

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[JSS3]

Try and recon the Barclay? It won't be another hard pull.

[chwebb1]

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@Anonymous wrote:

Hi Burned & SunriseEarth,

Thank you very much for your replies!

Here are my accounts.  The most recent one that I mentioned above is the Barclaycard at the bottom of the list:

Account: Balance/Credit Limit (% Utilization)

Patelco Visa Platinum: $12,753/$15,000 (85%)

Chase Slate Visa: $7,405.12/$14,100 (53%)

Bank of America Platinum Plus Visa: $3,622.99/$4,000 (91%)

Citi Hilton Hhonors Visa Signature: $1,509.12/$4,410 (34%)

Chase Freedom Visa: $0/$5,500 (0%)

American Express Blue: $0/$5,100 (0%)

Discover it: $0/$1,500 (0%)

Barclaycard Rewards World Mastercard: $0/$250 (0%)

Total: $25,290.23/$49,860 (51%)

Also, if in case some additional information is relevant, I have a student loan of $22,878.78, and  my credit scores are Equifax 676, TransUnion 678, and FICO 691.

Do you think it might be better to (1) close the Barclaycard account without ever using it, if that will restore my credit score to where it was before it was issued, as the bank seemed to be saying (although I honestly don't know how much of a negative impact it had on my overall score, since I didn't check my score first); (2) ask them to raise my credit limit after I pay my balances down further (assuming that will put a hard pull on my credit report); (3) just wait it out while I pay everything down; (4) something else?

Thank you again for your help!

---

Wow, I didn't even know that Barclaycard gave out cards with that low of a limit. Did you recently also add the Discover card? The reason I ask is those two cards are a lot lower CL than your others, so if so, I'd definitely tell you to garden for a while. If not do you have any baddies on your CR that might spook a lender (other than your two maxed CCs)?

[NRB525]

OP, what are the APR on each of those cards? Expiring BT offers timing? What is your annual income?

I too am surprised you got the $250 card at all. You can try to recon it, but what is your goal? $500? Keep the card open, it will grow over time.

Main thing is to pay down the balances. Unlikely apping new cards will provide much of a destination for these balances.