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Does closing subprime cards hurt my score?

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New Contributor

Does closing subprime cards hurt my score?

Hi all!

I have two credit one cards and a secured capital one card about 4 years old each. As I'm getting new cards from more reputable lenders, I'm thinking I should close those accounts. Credit one charges their annual fee at the same time as they process your new statement, so those can never report 0. You can't overpay on desktop, on app, or with an agent. Also I don't use them so I'm basically paying for them to help my AAOA. I do have perfect payment history because they removed a few lates for me before, so I'm thankful for that. The capital one has a low limit which I don't use personally, but my 20 year old is an AU and he uses it to pay his monthly student loan for autopay and turns right around and pays the bill a week later when he gets paid. I REALLY want to be able to see how AZEO would improve my scores (I'm in the high 600s now) but also I just don't want to keep subprime cards anymore. If I close them will that hurt my score? I plan on getting a new card to makeup for the combined limits (only about 2k). Once I get a new card with a higher limit reporting for a month or two should I ditch these guys?

5 REPLIES 5
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Moderator

Re: Does closing subprime cards hurt my score?

Closing them they remain on file for up to 10 years post close and as long as your utilization is under control you wont be hit with the loss of their credit limits. Since you are getting better cards its time to cancel anything with an AF or MF.

Message 2 of 6
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New Contributor

Re: Does closing subprime cards hurt my score?

Thanks @gdale6 ! That's great to hear. My utilization is never higher than 10% on any one card or 6% total. So as soon as I get a high limit (Navy fed) it's adios subprime!

Message 3 of 6
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Super Contributor

Re: Does closing subprime cards hurt my score?


@FixingMy3 wrote:

Hi all!

I have two credit one cards and a secured capital one card about 4 years old each. As I'm getting new cards from more reputable lenders, I'm thinking I should close those accounts. Credit one charges their annual fee at the same time as they process your new statement, so those can never report 0. You can't overpay on desktop, on app, or with an agent. Also I don't use them so I'm basically paying for them to help my AAOA. I do have perfect payment history because they removed a few lates for me before, so I'm thankful for that. The capital one has a low limit which I don't use personally, but my 20 year old is an AU and he uses it to pay his monthly student loan for autopay and turns right around and pays the bill a week later when he gets paid. I REALLY want to be able to see how AZEO would improve my scores (I'm in the high 600s now) but also I just don't want to keep subprime cards anymore. If I close them will that hurt my score? I plan on getting a new card to makeup for the combined limits (only about 2k). Once I get a new card with a higher limit reporting for a month or two should I ditch these guys?


Yes, once you've replaced the limits you should ditch them, but ditch them by phone, so that the CSR has an opportunity to give you a retention offer, such as dropping the annual fee or upgrading to a better card.


Total revolving limits 653000 (575000 reporting)

Message 4 of 6
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Super Contributor

Re: Does closing subprime cards hurt my score?

Agreed that OP should drop the subprime cards.

 

One thing worth noting though is that opening new CC accounts can temporarily lower your scores... new inquiries, new accounts, age of accounts reductions etc.  I know you were looking forward to trying AZEO out and you seem to be eager to see score gains, so just keep in mind that you plan of opening new accounts will go against that for the time being.

Message 5 of 6
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Regular Contributor

Re: Does closing subprime cards hurt my score?

You can get Credit One to drop their fee (at least for a period of time) over the phone - it's the only reason mine is still open.

If you use Bill Pay through your bank, you can pay the monthly fee ahead of time, so that it does report $0 for the month.

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