Target red. Would you close?

[stan_the_man]

The 5% Red Card discount, free shipping on any size order and 30 extra days for returns outweight any negatives of having a low credit limit in my opinion.

[DaveSignal]

I have a red card.  It doesn't have a huge limit, and I can't use it currently because there are no Target Stores where I currently live (I move around a lot), but I don't see any reason to close it.  There is no annual fee and the card offers good discounts.  

[QAMngrGirl]

Is having a low limit like $200 seen as a negative to prospective lenders?

[jsucool76]

I dont really think so. Id you had ALL low limits, then yes, but if you have a bunch of cards with nice limits, and then one with a low limit, i dont think it would be an issue. Just my opinion though.

[CreditWorld2013]

I may be mistaken but I believe I read somewhere that Target will keep/manage the Red Cards it currently has issued by them but all future applications will be issued/managed by TD. In any case, I would keep it open and hope that one day they do an account review and increase it. Just be sure to keep it active every few months. 

[jsucool76]

I hadn't heard about that CW2013, but you may very well be right. I just assumed TD would be taking over all of them, but you know what they say about assumptions. Lol

[youngandcreditwrthy]

I closed mine. After a year of no clis and a crappy $300 cl, I said to hell with it!
Ain't nobody got time for that!!! Lol

The thing is, a low limit like that would affect your average credit limit.
So, for issuers that, in theory, approve you with an initial avg CL of all your current CLs... That $300 CL could reduce an initial limit with a new creditor.

That's how I see it, and why I closed it!! It's such a hassle to only use 1/3 of a line that small anyway!

Good luck!

[DaveSignal]

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@youngandcreditwrthy wrote:

The thing is, a low limit like that would affect your average credit limit.
So, for issuers that, in theory, approve you with an initial avg CL of all your current CLs... That $300 CL could reduce an initial limit with a new creditor.

That's how I see it, and why I closed it!! It's such a hassle to only use 1/3 of a line that small anyway!

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My Target RED card has a $700 limit, but I am very certain that taking an average of your limits is not what lenders do when they issue new credit.  They usually match your highest or second highest limit card.... sometimes exactly.  Some cards have a minimum limit, like $5000.  If you get approved for a card like that, you will get at least the minimum limit.

And you don't have to only use 1/3 of the CL.  If you trying to prevent your FICO from dropping any points at all (ie: you are looking for a new loan very soon), then you can just pay the balance before the statement date.  Paying the full balance on a low limit card like that is a good practice anyway, though.  I always pay the full balance on my Target card.