Should I close my loan shark credit cards for a major bank secured credit card?

[money_talks]

Before I got the First Premier and Credit One Bank cards, I had a card with a major bank but the account was charged off. I settled for these 2 cards to rebuild my credit. These 2 are the only credit cards that are active for me right now.

FP opened in May 2011, CL=$300

Credit One opened in May 2012, CL=$650 (Opened at $400)

Wells Fargo is offering me a secured credit card. My deposit amount would be used as collateral and that would also be the amount of my CL. So I can essentially make a $950 deposit and only have one card without all the fees. Is this something I should do? If so, how would it affect my credit score?

Other things:

1) FP has not automatically increased my CL nor have I requested a CLI. If I decide to close FP, should I request a CLI so it can be reported to the credit bureaus and then close the account? FP charges $25 for every $100 in CLI, so would it be worth paying $25 for a bump in my credit score?

2) Same thing with Credit One, however, they did an automatic CLI in May 2013 from $400 to $650. Should I request a CLI before closing?

3) If getting the Wells Fargo card is a good idea, should I deposit more than $950? After about a year they review your account and if it's in good standing they convert it into a non-secured account and return your deposit. My concern here is that I don't want to have a lot of money tied up for a year.

4) I got the offer for a secured card back in June 2012 after being declined for a non-secured credit card from Wells Fargo. My TU FICO at that time was 538. As of today my TU FICO is 623. Should I apply for a non-secured Wells Fargo card first now that my credit score improved? If I do this though and get approved, I wouldn't have any say in the credit limit granted, correct?

Thanks

[09Lexie]

Welcome to the forum! Besides the 1 CO, what others items are on your cr?

[money_talks]

I actually have 2 COs, both credit cards, but only one of them has a balance. The one with the zero balance is listed as "transferred/sold". I will ask for advice on this on the other threads.

I have student loans paying as agreed, but plan to get an auto loan soon.

[lhcole77]

Based on my personal experience I would get the WF secured card. I don't think a 623 will qualify you for unsecured.

I would not pay FP for a CLI. I would make sure my balance is at $0 when closing.

I would keep the other credit card with the $650 balance IF there are no huge monthly fees and/or annual fees.

I learned over the years that sometimes I had to pay a little extra when rebuilding credit. It was worth it in the long run. I just closed my FP card last week because it no longer served me and my scores are now in the 730-779 range.

Good luck with whatever you choose to do. I am a happy WF customer and am glad that I have a banking and credit relationship with them. They are known for upgrading secured cards to unsecured after a set amount of time.

[money_talks]

lhcole77 wrote: I would keep the other credit card with the $650 balance IF there are no huge monthly fees and/or annual fees.

I currently have on the Credit One card a 23.90% APR and a $99 annual fee (charged at $8.25 monthly).

lhcole77 wrote: I don't think a 623 will qualify you for unsecured.

I understand the inquiry would hurt my credit score, but I'm trying to determine if it is worth a try at 623. Would the Wells Fargo banker have an idea if I could be approved with that score before applying?

[roniram]

As long as you have a good payment history, and don't go too crazy with credit apps, I don't think you should worry too much about the inquiries negatively affecting your score.  From my experience, my scores increased after obtaining additional credit after being afraid to "pull the trigger" for quite awhile.  You may want to do a little research into the cards you may qualify for first, then apply - that way you won't waste your time on applying for cards you won't recieve.  I've obtained Cap 1 and Walmart recently, and my scores are in your range, so you may want to try them.  I am about to get rid of Credit One....I hate that monthly fee, and their "fee for an increase".  Good luck!

[lhcole77]

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@money_talks wrote:

I understand the inquiry would hurt my credit score, but I'm trying to determine if it is worth a try at 623. Would the Wells Fargo banker have an idea if I could be approved with that score before applying?

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My best friend is a Wells Fargo banker and he doesn't think you would qualify.

WF loves to pull EX, especially in CA. WF doesn't have pre-approval sites either. I would suggest if you are GUARANTEED a secured card then go for that.

[lhcole77]

Update: My friend at WF says you "may" qualify for a College Credit Card with that score.

Any chance you're in school?

[money_talks]

lhcole77:

I am not in school. With an APR of 23.9% and $99 annual fee, what do you suggest to do with the Credit One card with a $650 limit?

Thanks for everyone's replies!

[lhcole77]

Good question.

Personally, I kept my FP card open UNTIL I qualified for prime cards. I think having an active card will help when applying for better cards. Mine was open for about 15 months when I qualified for AMEX and Citi.

I had a WF $2000 CL and a FP $700 at the time of apps. I had 7% UTL when I applied. And I think all of this helped me qualify.

At the end of the day you'll never know if you qualify unless you try. If you go for it I would make sure that one card is at 0 balance and the other is at less thatn 9% UTL. And I would make sure that these balances have been reported to the CRA when you apply.