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Closing low credit limit cards--good idea or not

Daisy2
New Member

Re: Closing low credit limit cards--good idea or not


@rchvmz wrote:

I appreciate the replies, however, in my original post, I indicated I am opening a Share Loan with PenFed in 2 weeks----I have 6 CC total, all unsecured, higest limit is 1k-------I can't see any fruitfulness coming from getting a high limit secured card, when data points arent being generated from the limits on a self secured card....Yes?


No. The secured cards you have will never graduate and become unsecured. They will stay within the limits they have now. But if you get the suggested secured cards, they become unsecured after a year. If you have cash and put let's say 5k per card, then by next year you'll have it unsecured with 5k limit per card. Card limit is very important as they determine your credit worthiness. If you have a card with 2k limit, next time you apply for a card, the bank will be more willing to match your 2k if not more.

Message 11 of 44
Horseshoez
Valued Contributor

Re: Closing low credit limit cards--good idea or not


@Daisy2 wrote:

@rchvmz wrote:

I appreciate the replies, however, in my original post, I indicated I am opening a Share Loan with PenFed in 2 weeks----I have 6 CC total, all unsecured, higest limit is 1k-------I can't see any fruitfulness coming from getting a high limit secured card, when data points arent being generated from the limits on a self secured card....Yes?


No. The secured cards you have will never graduate and become unsecured. They will stay within the limits they have now. But if you get the suggested secured cards, they become unsecured after a year. If you have cash and put let's say 5k per card, then by next year you'll have it unsecured with 5k limit per card. Card limit is very important as they determine your credit worthiness. If you have a card with 2k limit, next time you apply for a card, the bank will be more willing to match your 2k if not more.


Keep in mind, graduation times vary by financial institution; my secured TDCash card with a $5,000 limit from TDBank graduated exactly 6-months to the day after I made my first charge.  I believe I've read the NFCU nRewards card graduates as quickly as 6-months as well, and the Discover secured card frequently graduates as quickly as 8-months.

I categorically refuse to do AZEO!

Message 12 of 44
rchvmz
Established Member

Re: Closing low credit limit cards--good idea or not

I have NO secured cards---

Message 13 of 44
rchvmz
Established Member

Re: Closing low credit limit cards--good idea or not

 

 Does TD bank do a SOFT pull initially when applying for the secured card?------I have a non-discharged Chpt13 on my file until Oct. 2021

Message 14 of 44
Horseshoez
Valued Contributor

Re: Closing low credit limit cards--good idea or not


@rchvmz wrote:

 

 Does TD bank do a SOFT pull initially when applying for the secured card?------I have a non-discharged Chpt13 on my file until Oct. 2021


They didn't do a pull at all prior to applying, I simply went into the branch, asked what was the maximum amount I could open a secured card for.  The manager told me the limit was $5,000, so I had her create the special interest bearing savings account TD uses for a security deposit, she then transferred the money into it and "locked" it on the spot.  I just checked my credit reports and bank statements for June 2020 and TD did a hard pull the day after I applied.  What does this mean?  Either TDBank will open a secured card as soon as the money is securely locked in the savings account, or I was effectively on the bubble for a day and could still have been denied; I don't know which.

 

Thinking about it in hindsight, the fact I opened up my checking and savings account with TD about five weeks prior and already had more than the $5,000 I used for my security deposit in a savings account certainly made things easy.  I suppose if you're applying for their secured card and do not already have an account or two set up, it could make things a bit messy, but I'm sure they have a way of dealing with that.

 

Side comment regarding the secured version of the TDCash card; some folks seem to balk at the fact the card has a $29 annual fee while secured.  While true, that fee is A) prorated at graduation and the balance is credited to your account, B) the locked savings account earns interest (not much I'll grant you), and C) while secured, the TDCash card returns 1% cash on all purchases.  In my case, since my card graduated after exactly six months, I received a $14.50 credit for the annual fee and by that time I'd also earned $1.27 in interest and $114.74 in cash back rewards.  Long story short, I came out over $100 ahead by going with a card with a modest annual fee plus rewards versus going with a no-AF card which pays no rewards or interest on the security deposit (thinking CapOne here).

I categorically refuse to do AZEO!

Message 15 of 44
rchvmz
Established Member

Re: Closing low credit limit cards--good idea or not

Ok, I am not in an area that has TD banks, so that puts me out for these guys---I went in and checked, and I am not. So as far as secured cards go, I have 0------here is what I do have currently----

 

Aspire-1000-----0 bal

Fortiva-1000----25.00 bal

Fortiva Gardner White store card-2000--0 bal

Comenity Overstock Store card-2550--0 bal

Surge-800--0 bal

Mission Lane-800--0 bal

Credit one--400---0 bal

Indigo---300--0 bal

First Access---400---0 bal

 

I am keeping one card with a small bal and use the others, but PIF each month----so they keep reporting. 

On July 18th I am opening a share loan with PenFed. 

My Chpt 13 is due for discharge Oct 1-------Fulfilled my 36 month obligation. 

Current Fico 8 scores-----EQ-630     Ex-640    Tr--618

I have one collection for 256.00 I am paying off next week. 

 

All in all, for being in a active BK, I am lucky to have the cards I have. I do not know if having a secured card, unless it graduates <1 year, is worth the squeeze(HP) with how I am situated right now. I could be wrong. I am open to suggestions tho--But TD bank is out, and NFCU is too, they are in the BK--so is Discover. 

 

Message 16 of 44
Horseshoez
Valued Contributor

Re: Closing low credit limit cards--good idea or not

@rchvmz, hmmm, bummer about your location vis-à-vis TDBank, and double bummer about Discover and NFCU.  I have heard positive reviews regarding the secured credit card offered by First National Bank of Omaha (FNBO); as I understand it, you can dynamically increase your security deposit after opening the account (a cool feature) up to a cap of $5,000.  They have a published graduation review set at 11-months, but I believe I've read some accounts where they've graduated cards sooner.

 

Other options for high limit secured cards are local credit unions and some local banks.  I keep circling back to the high limit secured card option for you as I am like 99.5% sure having such a card last year is what opened the doors for me following my Chapter 13 discharge.  Don't get me wrong, I'm not yet to the point where I can apply for anything I please, but my last application netted me a PenFed Platinum Rewards Signature Visa with a $6,000 limit, so I'm definitely getting there.

I categorically refuse to do AZEO!

Message 17 of 44
rchvmz
Established Member

Re: Closing low credit limit cards--good idea or not

I am actually in pretty good shape for being in an active BK-----once it Discharges, my score will jump a bit---Cap one is a good one for giving cards fresh out of BK------so, I think leaving my file as is for now is gonna be my best bet----I really see no reson to open a secured card---Surge gave me a 300.00 increase and I am due for another in 3 weeks-----Overstock went from 250.00 to 2550 in less than 6 months. Mission Lane is due for a auto increase end of July-----so--letting it ride seems to be the thing to do here

Message 18 of 44
Nikita2008
Contributor

Re: Closing low credit limit cards--good idea or not

I've had experience with these cards, they are not growable. Destiny offers no CLI, First Access rarely does, and if First Premeir does, they charge for it. FP and FA  other have month.y fees.

Message 19 of 44
GrandBay
Frequent Contributor

Re: Closing low credit limit cards--good idea or not

@rchvmz  Not sure the purpose of your post because you seem hostile to feedback and suggestions. 

Message 20 of 44
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