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Closing subprime cards

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Regular Contributor

Closing subprime cards

I've got 3-4 subprime cards that I want to pay off and be done with. Finito, buh bye, nice to know yah.

 

Just got my federal tax refund and the small balances I have on them I plan on paying off and closing them. 

 

I'm in rebuilding mode but am getting close to out of the gutter, have about $3500 in credit lines. 9 cards on my resume. Keepers: Cap One Plat Secured ($500), Cap One QS1 ($500), Discover IT Chrome ($200 CL), and my AMEX Green (majority of my spend, roughly $3500 a month, always PAID IN FULL).

 

Rest of my cards are subprime and are closing. 2 Credit One's, Open Sky, Blaze MC, and Legacy VISA.

 

My question is....does shutting off these credit lines help? Of course it's great to get rid of these cards but it's also lowering my overall credit limits when I close them. And does shutting a bunch of cards at once raise any red flags on the credit report? 

 

Two years ago I had a vantage score of 407. Car Repo, several baddies, and student loan missed payments all over the place. It's been quite a journey just to get where I'm at now. FICOS all in the Mid 600's and I'm about to bring my utilzation down to 0% across the board thanks to my tax refund so according to the Experian Projector, I'll have an EX 679 in a few weeks. EQ & TU will be roughly 660. 

 

Basically in the garden and am waiting a year or so and hopefully by then I can get a Chase Freedom card. That's my goal. And also in May of this year, my one year AMEX anniversary (!), will be upgrading to the Gold Card (!).  


AMEX Platinum (Upgraded from Green) / Cap One QS1 $500 /Cap One Plat Sec - $500 / Blaze MC $750 / Legacy VISA $750 /
Credit One (2) $500 & $650 / OpenSky $500 / Discover IT Cash Back (Graduated Secured) $200
Jan of 2017 Credit Karma: 404 -SEPT OF 2018: EX 652 EQ 626 TU 604 / MARCH OF 2019: EX 667 EQ 637 TU 629
Total Credit Limit: $4350 - Goal Score: 675 for all FICOS - Goal Card: AMEX PLATINUM (ACHIEVED, March 2019)
Next Goal Card: Amazon Prime Rewards/Chase Freedom - Amex Everyday/Amex Blue Cash
Message 1 of 6
5 REPLIES 5
Regular Contributor

Re: Closing subprime cards

First, it’s always my preference to avoid a bunch of sudden, drastic changes. For that reason, I wouldn’t close all 3-4 of them at the same time.

Secondly, looks like you’d be dropping your total available credit to $1200, correct? If so, does that meet your needs? With only $1200 available, you’d want to keep your utilization between $100 & $350.

I can understand the want to drop the subprime cards, but don’t forget they are a means to an end. Don’t rush the end and as a result do more damage. If one of those you mention has an AF, maybe consider closing it, but let the rest sit until you can obtain replacements.
Personal Credit -
AMEX: Platinum, Green, Cash Magnet, Delta Gold
PNC: Cash Rewards
NFCU: Flaghship Rewards, Cash Rewards, CLOC
PSECU: Founders
BB&T: Spectrum Cash Rewards
CapOne: Quicksilver
Discover: IT Chrome
Synchrony: PayPal 2%, PayPal Credit
Store Cards: Target
AU Cards: Citi Rewards+

Business Credit-
AMEX: Blue Business Plus, Amazon Prime, Simply Cash Plus
Message 2 of 6
Regular Contributor

Re: Closing subprime cards

Perfect response and thank you. I figured that might be a bit much in my head that's why I made the post.

 

I think I'm going to close the OpenSky, which have been paying on for 2 years and have a $400 deposit that will be returned to me. 

 

The Credit One cards stink as we all know, but they have kept giving me CLI's every few months. Started off with $300 a piece and now both cards are at $650. 

 

I'll go the slow route. Thanks for the input!


AMEX Platinum (Upgraded from Green) / Cap One QS1 $500 /Cap One Plat Sec - $500 / Blaze MC $750 / Legacy VISA $750 /
Credit One (2) $500 & $650 / OpenSky $500 / Discover IT Cash Back (Graduated Secured) $200
Jan of 2017 Credit Karma: 404 -SEPT OF 2018: EX 652 EQ 626 TU 604 / MARCH OF 2019: EX 667 EQ 637 TU 629
Total Credit Limit: $4350 - Goal Score: 675 for all FICOS - Goal Card: AMEX PLATINUM (ACHIEVED, March 2019)
Next Goal Card: Amazon Prime Rewards/Chase Freedom - Amex Everyday/Amex Blue Cash
Message 3 of 6
Valued Contributor

Re: Closing subprime cards

Also just to throw this out there based on your post, you said you were about to go to 0% aggregate usage. Don’t do that, as you’ll lose points for “having no credit in use”. Leave $5-10 to report on one card so that you don’t take a zero-usage penalty.

Also, anytime you pay off a card, continue to watch that card’s Account. It’s very likely that there will be some trailing interest that shows up the next month. Pay that off as soon as it posts. Once you pass a statement cut date that shows zero balance, THEN close the card. Many people have been burned by trailing interest they never looked for and were unaware of until a 30-late hit their reports...
Rebuild commenced 5/2018

AmEx Delta Skymiles Gold | AmEx Hilton Honors Ascend | AmEx Hilton Honors | Discover IT | Target | VS | Home Depot | Lowes | CapOne QuickSilver | Wayfair | Kohl’s

Charter Member of the Disco “No CLI For You!” Club



Message 4 of 6
Frequent Contributor

Re: Closing subprime cards

Also keep in mind that not that it matters but it will tank your Credit Karma scores. 

As you see posted just about every hour the Credit Karma scores are not FICO scores and don't matter.

One difference is your average age of accounts AAoA with CK does not include closed accounts.

 

I mention this so you don't freak out if you see your CC drop 100 points.

 

Currently my CC is over 100 points lower than my actual FICO Scores.

Message 5 of 6
Regular Contributor

Re: Closing subprime cards


@njcobra10tha wrote:

Also keep in mind that not that it matters but it will tank your Credit Karma scores. 

As you see posted just about every hour the Credit Karma scores are not FICO scores and don't matter.

One difference is your average age of accounts AAoA with CK does not include closed accounts.

 

I mention this so you don't freak out if you see your CC drop 100 points.

 

Currently my CC is over 100 points lower than my actual FICO Scores.


Oh god I don't even pay attention to Credit Karma anymore. Last time I checked it a few months back I was at least 110 points lower. I have an experian account to keep track of my FICO 8. 


AMEX Platinum (Upgraded from Green) / Cap One QS1 $500 /Cap One Plat Sec - $500 / Blaze MC $750 / Legacy VISA $750 /
Credit One (2) $500 & $650 / OpenSky $500 / Discover IT Cash Back (Graduated Secured) $200
Jan of 2017 Credit Karma: 404 -SEPT OF 2018: EX 652 EQ 626 TU 604 / MARCH OF 2019: EX 667 EQ 637 TU 629
Total Credit Limit: $4350 - Goal Score: 675 for all FICOS - Goal Card: AMEX PLATINUM (ACHIEVED, March 2019)
Next Goal Card: Amazon Prime Rewards/Chase Freedom - Amex Everyday/Amex Blue Cash
Message 6 of 6