Switching From Secured Credit Card to an Unsecured Credit Card
Author: NikkiG
Posted: Mon May 29, 2006 7:07 pm
Post subject: When to get rid of a secured card?
My friend has only 11 months established history. He took out an Orchard Bank secured card for $200 in March. In April he was approved for the B of A partially secured card and a Citibank Bronze AA card-both with $500 limits. About 2 weeks ago he was on the B of A site and decided to click on the tab for pre approved offers. They gave him three offers and lo and behold he was approved for another B of A card with a $1,500 limit.
My question is this-should he close his secured Orchard card now or wait until closer to annual fee time next year? Will closing this account hurt his credit scores really badly since technically it only has a month of history on the others?
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Author: stevejk
Posted: Tue May 30, 2006 10:11 am
Post subject:
If he's paying an annual fee on the secured card, I'd say wait until closer to renewal before closing it. As for the others, assuming they do not charge an annual fee, keep them to provide a credit history.
There may be short term hit when closing the secured card, if only because it shortens the credit history and reduces the debt/CL ratio, but as time goes on it will have less and less an impact. Having a one month difference in a credit history will have less inpact as time goes on.
Author: fire3000
Posted: Tue May 30, 2006 4:34 pm
Post subject: $200 Secured Card
Now that he has an unsecured card with a high limit, he simply does not need the Orchard card anymore. The credit limit is less than 10% of his total of limits so closing it will not affect his credit score much and the card history will remain on his reports. Having a card from a sub prime issurer such as Orchard does not make his credit report appealing when he later applies for another prime card. Orchard will probably offer to convert it to an unsecured card or offer a CLI, but he should say no and request his deposit back. He will then have one less card to worry about.
Author: jlrdc909
Posted: Wed May 31, 2006 6:09 am
Post subject: Switching From Secured Credit Card to an Unsecured Credit Card
Wait closer to the anniversary date to close the card. I doubt Orchard bank will waive any annual fees, it looks like your friend has limited history, so closing that card should not send him/her down hill too much.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Mon May 29, 2006 7:07 pm
Post subject: When to get rid of a secured card?
My friend has only 11 months established history. He took out an Orchard Bank secured card for $200 in March. In April he was approved for the B of A partially secured card and a Citibank Bronze AA card-both with $500 limits. About 2 weeks ago he was on the B of A site and decided to click on the tab for pre approved offers. They gave him three offers and lo and behold he was approved for another B of A card with a $1,500 limit.
My question is this-should he close his secured Orchard card now or wait until closer to annual fee time next year? Will closing this account hurt his credit scores really badly since technically it only has a month of history on the others?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: stevejk
Posted: Tue May 30, 2006 10:11 am
Post subject:
If he's paying an annual fee on the secured card, I'd say wait until closer to renewal before closing it. As for the others, assuming they do not charge an annual fee, keep them to provide a credit history.
There may be short term hit when closing the secured card, if only because it shortens the credit history and reduces the debt/CL ratio, but as time goes on it will have less and less an impact. Having a one month difference in a credit history will have less inpact as time goes on.
Author: fire3000
Posted: Tue May 30, 2006 4:34 pm
Post subject: $200 Secured Card
Now that he has an unsecured card with a high limit, he simply does not need the Orchard card anymore. The credit limit is less than 10% of his total of limits so closing it will not affect his credit score much and the card history will remain on his reports. Having a card from a sub prime issurer such as Orchard does not make his credit report appealing when he later applies for another prime card. Orchard will probably offer to convert it to an unsecured card or offer a CLI, but he should say no and request his deposit back. He will then have one less card to worry about.
Author: jlrdc909
Posted: Wed May 31, 2006 6:09 am
Post subject: Switching From Secured Credit Card to an Unsecured Credit Card
Wait closer to the anniversary date to close the card. I doubt Orchard bank will waive any annual fees, it looks like your friend has limited history, so closing that card should not send him/her down hill too much.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 4:31 PM
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