IS HAVING BOTH SECURED AND UNSECURED CREDIT CARDS OK?

[Anonymous]

I am new to credit cards. I applied at discover for a secured card cause I didn’t think that I am going to get approved from any banks knowing that I didn’t have a credit history at all. I got the card 3 weeks ago. But I also tried to apply at Chase bank for an unsecured card, I have a decent savings with them and luckily I got approved. And I got the card few days ago. Is having secured and unsecured credit cards at the same time ok? How is it going to affect my credit score? I know that it will show on my report if my credit is secured or unsecured. I don’t know if it will affect my credit score having a secured card. So is it better to close the secured card now? Cause I know it’s going to make a negative impact to my credit score in the future if I close it when I already build the score. Please help. Thank you so much!

[Anonymous]

My comments in blue below.

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@Anonymous wrote:
Is having secured and unsecured credit cards at the same time ok? How is it going to affect my credit score? I know that it will show on my report if my credit is secured or unsecured. I don’t know if it will affect my credit score having a secured card. So is it better to close the secured card now?

FICO models do not distinguish between secured and unsecured cards.  Your secured card is fine.

Cause I know it’s going to make a negative impact to my credit score in the future if I close it when I already build the score.

Actually that's not true.  If you were to decide to close it in (say) five years from now, that should have no effect on your score.  The only way it would have a possible effect is if closing it caused your number of open cards to go from a small number (2-3) to a very small number (1-2)... or if closing it reduced your total credit limit by a big amount.

So basically this is easy to fix.  Keep it open for a while.  If in 4-5 years you have a larger number of cards (say six) then feel free to close it then.  But don't go crazy adding cards in the next few years.  Open a credit card moving forward only if you can see yourself keeping it open for a very long time and because it is a major credit card that has some nice features.  (No annual fee is a nice feature, but there are others.)

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[Anonymous]

Keep both cards! Ha, the more cards you have at the beginning the better your "base" to build your average age of accounts on. Technically, if you close it 10 years from now, the account continues to age on your report for 10 years, meaning that realistically, it wouldn't drop off your report until 2038 (if it were open for 10 years + 10 years as a closed account). At that point, your average age of accounts might dip a little, but I'm getting very long-term here. Just keep it open, it will allow your credit to build that much faster (eg, you are recording 2 on-time payments per month rather than just one). I too once had a secured Discover IT chrome, and now it is unsecured @ $6,100 just 14 months after opening the account (it unsecured after 7 months) Great company and card to have, it was my 2nd card.