close secured account, and use deposit on another credit line increase ok?

[jason0618]

I just read the sticky about closing accounts, but I wanted to make sure of another aspect.

I have a Capital One secured credit card and a Navy Federal secured card.  Cap1 has a $600 limit, secured in full, and the NFCU has $1000, also secured in full.  Every month, I make payment to capital one, multiple times a month because I try to keep it low. Sometimes I bring it right to the limit and then payoff, other times, I'll just charge a couple of hundred, and payoff.  Anyway, in the past few months, they've taken to applying my payment, but then holding the funds for a week.  I use this card to pay bills, etc, so it's not a good situation.  I've never had a payment returned, EVER, so I don't know why they've started this, but it's gotten to the point that I'm fed up with them.  Is that standard practice with a secured card?

I've only had one payment made on the Navy Federal card, and it posted instantly, and was credited instantly.  However, I do have checking, savings, and a couple of CD's with them, so maybe that makes a difference since the money to pay came from existing funds they know are in my account.  

Anyway, I'm seriously thinking about just closing the Capital One account, and taking my $600 security deposit and using it to increase my limit equally with NFCU.  The Capital One card is currently showing a credit balance of $0.11- so if I close it, they'd mail me a check for $600.11 right?  If I increase the NFCU limit by that same $600, that should have no effect on my score, or utilization, right?  Cap1 will just continue to report positively for the next ten years, and by that point, NFCU will be over ten years old, anyway. 

I just want to make sure I'm not cutting of my nose to spite my face, so to speak...

[webhopper]

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@jason0618 wrote:

I just read the sticky about closing accounts, but I wanted to make sure of another aspect.

I have a Capital One secured credit card and a Navy Federal secured card.  Cap1 has a $600 limit, secured in full, and the NFCU has $1000, also secured in full.  Every month, I make payment to capital one, multiple times a month because I try to keep it low. Sometimes I bring it right to the limit and then payoff, other times, I'll just charge a couple of hundred, and payoff.  Anyway, in the past few months, they've taken to applying my payment, but then holding the funds for a week.  I use this card to pay bills, etc, so it's not a good situation.  I've never had a payment returned, EVER, so I don't know why they've started this, but it's gotten to the point that I'm fed up with them.  Is that standard practice with a secured card?

I've only had one payment made on the Navy Federal card, and it posted instantly, and was credited instantly.  However, I do have checking, savings, and a couple of CD's with them, so maybe that makes a difference since the money to pay came from existing funds they know are in my account.  

Anyway, I'm seriously thinking about just closing the Capital One account, and taking my $600 security deposit and using it to increase my limit equally with NFCU.  The Capital One card is currently showing a credit balance of $0.11- so if I close it, they'd mail me a check for $600.11 right?  If I increase the NFCU limit by that same $600, that should have no effect on my score, or utilization, right?  Cap1 will just continue to report positively for the next ten years, and by that point, NFCU will be over ten years old, anyway. 

I just want to make sure I'm not cutting of my nose to spite my face, so to speak...

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I would do exactly what you are talking about, I would call them today and have them close the account and send back your deposit and apply your deposit towards NFCU...   it is my understanding that NFCU graduates in 12 months... how long have you had the NFCU account open?

What are your current scores?  Also, you could check out doing a secured loan with NFCU, as a secured loan counts as positive installment loan history. Once you do the secured loan, you give them your $600 and then they give it right back...    Then you could use your 600 to add to your NFCU secured visa.  You just have to be sure that you make payments to that loan.. its like forcing youself to save, because at the end of 12 months, you get your money back after paying off the loan

[pizzadude]

If you are working to boost your FICO score, you should have two or three revolving accounts open rather than just one ~ FICO likes to see more than one open account.

[Revelate]

Are these the only two cards you have?

2 revolving tradelines (read: credit cards) are much better than one.  Absolutely do not close the C1 card just to increase the NFCU one.

Limits on secured cards are VASTLY overrated: you get a secured card to build/rebuild your credit score, that is the only reason for it.  If you care about the score, rather than the ability to float a balance, then you can manage your utilization just fine without it... and you want multiple tradelines.

Increasing a limit on a secured card *might* give you higher CL's for future card approvals, but that's it.  There's no other intrinsic value to them unless you carry a balance, and at that point the money spent on increasing the limit would be better spent in paying off your debt.  Do not do this, you will be cutting your nose off to spite your face.

[Anonymous]

If you want to get another unsecured CC from Capital One, then a big deposit on the secured card can help get a big limit on unsecured card (It did for me).  If not, then close the card.

IMO, big deposits on secured card are underrated.  They help with utilization, ability to make large purchase, don't have to constantly pay.  In my experience, they help with larger unsecured CL about 1/2 the time. 

[Anonymous]

Keep the cap one account open for about a year. You don't want to close it and have only one trade line open. Being the NFCU card has a bigger limit why don't you put your spending on that card and just charge some cookies here and there to cap one.

[Anonymous]

+1 pizzadude. Don't close cap one yet. Having 3 revolving lines open is ideal. Just forget cap one card and use the navy one

[Anonymous]

Jason - if the main issue is just them holding your payments, you can call them and ask them to release the funds after you make a payment (usually the next day when the payment posts).  I had this problem when I first opened up my Cap 1 account after I made my first few payments and it lasted for about the first 4 months.  I just read elsewhere on here that someone else was experiencing the same issue.  I know it's annoying, but it will solve the problem. Their system gets very tempermental when it comes to making several large payments a month.  

[Anonymous]

I'm not trying to turn this into a cap one secured vs nfcu but if they are holding your funds and what not just move your spending to navy. Navy's card will grow with you. Cap one won't. You ever call cap one and get Peggy? There is no Peggy with NFCU! Lol

[jason0618]

Thanks for the advice, everybody.  I think I'll just follow the majority here, and keep Cap 1 open, but just not use it as much.  Since it's got a zero balance right now, that shouldn 't be too difficult to manage.  

You're right, though...  I always get Peggy when I call Cap One, never at NFCU.  I also always get helpful people at NFCU, not so much at Cap1, but I guess that's the downside to having a credit rebuilding card.  They don't really have to be friendly since they know options are limited, lol.

Also, since the general consensus is that Cap One will NEVER unsecure this card, does that mean when I'm and old and feeble 93 year old guy that I'll have to remind my great, great grandchildren to get my money from them when I die?  If not, then when is a good time to close that account?