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Strategy for Closing Recently Opened Cards

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ForwardLooking
Regular Contributor

Strategy for Closing Recently Opened Cards

I have been working on rebuilding my finances for the past year after a hard 4 years.  Not going to go into details on specifics, but I will share what I think is relevant to get some advice.  I am looking for a strategy for shutting down and closing some cards.

 

I had a goal of getting about $6500 in revolving credit reported to help boost my scores by offsetting an old closed account with a remaining outstanding balance of about $1800  -- bringing my overall utilization to under 30%.  (Yes I did try contacting the original creditor to pay it off, but they did not respond to my corespondence.  It is now past the SOL and I probably will not try approaching them again unless they reach out to me.  It has not been sold to a CA as far as I know.) 

 

I accomplished my goal last year, and since then I have received some CLIs and recently was approved for a new Ally card with no annual fees.  I PIF each month and do not to carry balances on my active open cards.  This seems to have helped as my scores are currently in the 658-690 Fico 8 range (myFico 3B subscriber).

 

The cards I would like to close are Destiny and Avant -- both with $300 CLs, AFs, and opened last August.  They are not bringing me any benefit now since my other tradelines have improved.  (Hindsight tells me I should have probably been a little more patient and not got them in the first place.)

 

Should I just close these two cards now?

Should I wait until its closer to a year on them but before they charge another AF?

Should I stagger their closing dates and possibly pay for another year on one of them?

 

Thanks everyone in advance!!

Message 1 of 15
14 REPLIES 14
GatoradeZeroGuy
Valued Contributor

Re: Strategy for Closing Recently Opened Cards


@ForwardLooking wrote:

Should I just close these two cards now? 

Should I wait until its closer to a year on them but before they charge another AF?

Should I stagger their closing dates and possibly pay for another year on one of them?

 

Thanks everyone in advance!!


You can close them now or close them before the AF hits, it's up to you. Probably technically better to get in the ~11 good positive payment history months, but if you think these cards a burden to keep/hold/manage/keep track of just close them it's no real loss to close them now.

Do figure out how to contact the OC of your CO and pay them. If you sincerely cannot find out how to pay them, a dispute would result in its removal since they wouldn't be able to confirm the debt. I doubt this is going to happen, so there has to be someway for you to pay/settle that debt. Does the FI just not exist anymore? 

Starting FICO 8:

Current FICO 8:

3/6, 5/12, 14/24

Message 2 of 15
ForwardLooking
Regular Contributor

Re: Strategy for Closing Recently Opened Cards

Thanks for the response.  Cards are not a burden, so I will wait until about the 11th month.  Would it be better to suck it up one more year, pay one more round of AFs, and do it next year?  You seem to be implying that having some time before closing would be better.

 

I did reach out to the OC several times for the CO.  They seem to be confused themselves and say they cannot accept payment because they issued me a 1099-C.  Cannot seem to be able to convince them otherwise, which is wierd.  Usually, it is the consumer that is confused about paying after the 1099-C, not the creditor.  I'll probably try again in a few months though since the SOL should be well established by then (it just reached the SOL in December).

Message 3 of 15
GatoradeZeroGuy
Valued Contributor

Re: Strategy for Closing Recently Opened Cards


@ForwardLooking wrote:

Thanks for the response.  Cards are not a burden, so I will wait until about the 11th month.  Would it be better to suck it up one more year, pay one more round of AFs, and do it next year?  You seem to be implying that having some time before closing would be better.

 

I did reach out to the OC several times for the CO.  They seem to be confused themselves and say they cannot accept payment because they issued me a 1099-C.  Cannot seem to be able to convince them otherwise, which is wierd.  Usually, it is the consumer that is confused about paying after the 1099-C, not the creditor.  I'll probably try again in a few months though since the SOL should be well established by then (it just reached the SOL in December).


if they've forgiven it (1099-C'd it), the reported balance should be $0? They can't 1099-c it, not accept payment on it and still report a balance on it all at the same time. Do you have that 1099-C, I wonder if that's dispute evidence enough to get the balance to report $0. 

 

That was my understanding. 

You have other cards, don't pay the AFs just close them out at the 11th month.

Starting FICO 8:

Current FICO 8:

3/6, 5/12, 14/24

Message 4 of 15
ForwardLooking
Regular Contributor

Re: Strategy for Closing Recently Opened Cards

I do have the 1099-C, the emails, and the snail mail corespondences with them.  I'll gather them and use them as part of a formal dispute.  Thanks for pointing that out!

 

Also, thanks for the confirmation on the 11th month on closing the other cards!

Message 5 of 15
Horseshoez
Senior Contributor

Re: Strategy for Closing Recently Opened Cards

@ForwardLooking, maybe its just me, but I don't see the benefit of waiting for 11 months to close those two cards.  Three years ago I closed a card after less than 7 weeks; it still shows up as a positive on my credit reports, and probably will do so for another 7 years.

I categorically refuse to do AZEO!
Message 6 of 15
ForwardLooking
Regular Contributor

Re: Strategy for Closing Recently Opened Cards


@Horseshoez wrote:

@ForwardLooking, maybe its just me, but I don't see the benefit of waiting for 11 months to close those two cards.  Three years ago I closed a card after less than 7 weeks; it still shows up as a positive on my credit reports, and probably will do so for another 7 years.


Did you have any negative impacts from lenders later?  I want to close them, but I don't want to look like a card churner which can spook some banks.  I am assuming I could ask for a recon if that was an issue -- simply explaining I was moving away from ultra sub-prime lenders.  Obvisouly I am out of guidelines for banks like Chase with their 5/24 rule, but I don't want to rock the boat with my chances at Navy Federal as I am due for a review on my nRewards card soon to hopefully graduate it.

Message 7 of 15
Horseshoez
Senior Contributor

Re: Strategy for Closing Recently Opened Cards


@ForwardLooking wrote:

@Horseshoez wrote:

@ForwardLooking, maybe its just me, but I don't see the benefit of waiting for 11 months to close those two cards.  Three years ago I closed a card after less than 7 weeks; it still shows up as a positive on my credit reports, and probably will do so for another 7 years.


Did you have any negative impacts from lenders later?  I want to close them, but I don't want to look like a card churner which can spook some banks.  I am assuming I could ask for a recon if that was an issue -- simply explaining I was moving away from ultra sub-prime lenders.  Obvisouly I am out of guidelines for banks like Chase with their 5/24 rule, but I don't want to rock the boat with my chances at Navy Federal as I am due for a review on my nRewards card soon to hopefully graduate it.


No negative impact, if anything, the impact was positive.

I categorically refuse to do AZEO!
Message 8 of 15
GatoradeZeroGuy
Valued Contributor

Re: Strategy for Closing Recently Opened Cards


@ForwardLooking wrote:

@Horseshoez wrote:

@ForwardLooking, maybe its just me, but I don't see the benefit of waiting for 11 months to close those two cards.  Three years ago I closed a card after less than 7 weeks; it still shows up as a positive on my credit reports, and probably will do so for another 7 years.


Did you have any negative impacts from lenders later?  I want to close them, but I don't want to look like a card churner which can spook some banks.  I am assuming I could ask for a recon if that was an issue -- simply explaining I was moving away from ultra sub-prime lenders.  Obvisouly I am out of guidelines for banks like Chase with their 5/24 rule, but I don't want to rock the boat with my chances at Navy Federal as I am due for a review on my nRewards card soon to hopefully graduate it.


owing $1800 in an unpaid CO is way more spooky than closing two never late $300 subprime cards a month later 

closing the two cards will just end being a blip all things considered regardless if you close them now or in ~10-11 months 

Starting FICO 8:

Current FICO 8:

3/6, 5/12, 14/24

Message 9 of 15
ForwardLooking
Regular Contributor

Re: Strategy for Closing Recently Opened Cards


@GatoradeZeroGuy wrote:

@ForwardLooking wrote:

@Horseshoez wrote:

@ForwardLooking, maybe its just me, but I don't see the benefit of waiting for 11 months to close those two cards.  Three years ago I closed a card after less than 7 weeks; it still shows up as a positive on my credit reports, and probably will do so for another 7 years.


Did you have any negative impacts from lenders later?  I want to close them, but I don't want to look like a card churner which can spook some banks.  I am assuming I could ask for a recon if that was an issue -- simply explaining I was moving away from ultra sub-prime lenders.  Obvisouly I am out of guidelines for banks like Chase with their 5/24 rule, but I don't want to rock the boat with my chances at Navy Federal as I am due for a review on my nRewards card soon to hopefully graduate it.


owing $1800 in an unpaid CO is way more spooky than closing two never late $300 subprime cards a month later 

closing the two cards will just end being a blip all things considered regardless if you close them now or in ~10-11 months 


Good point.  But it has never been reported as a CO / charge off.  Last update was 2019 as 120 days late and no updates since then.  Wierd part is is shows good payment status after 2019, but I have not paid anything towards it.  Perhaps they just can't get their act together on reporting?

Screenshot 2023-01-15 194424.png

Message 10 of 15
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