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Thread: Pay off - should I close CCs

  1. #1
    AudreyLeigh
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    Default Pay off - should I close CCs

    I know not to close CCs because it lowers your available credit. BUT Ive been really looking at my cards. First Ill say theyre ALL sub prime because of my Ch 7 bk but Im slowly building my credit back up. Im making $2000 at the end of the month and will pay 1 card off. The others one a month until theyre done. This is the order Im thinking to pay off. Tell me if any changes should be made. Thanks.

    WaMu. $1300 limit currently @ 0% 6 mo intro. I dont know what the interest rate is. Im searching the website now. This one was opened in October. I think I should pay this one first to avoid interest.

    The next one is a very high interest 23.99% and also has a monthly fee 10.95 and a yearly fee 119.95. I didnt read the fine print when I opened it. This ones a no brainer. It was a $850 limit but I already closed it. Yearly fee will be charged in April. Im thinking this should be #2 paid off (in March)

    #s 2-3 are my Cap 1 accounts. $300 and $500. Interest rate 19.15%. I dont know if theres a yearly fee and/or what it is. I dont think there is one.

    Orchard Bank. Secured Card. This card I got 2 months after my Ch 7. Ive had it over 2 years and its only a $200 limit and is @ 17.95%. I really think i need to keep this one because its my entire credit history but should I send them more money to make the available credit more? Maybe like another $1000?

    My plan is to keep the WaMu card because its the highest limit and the Orchard Bank because that one Ive had the longest.

    Should I close both the Cap1 accounts along with the one I already closed? How much of a hit will my CR take to close 3 CC accounts within a couple months time? Should I space them out? Will it matter? I know theyre just small limits but all together thats $1650 in available credit and leaves me with $1500 in available...

    The only other things on my CR are my car and student loans which are both paid on time every month.

  2. #2
    Banned Melonie's Avatar
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    Default Re: Pay off - should I close CCs

    I vote to keep one card ... the card that has the best reputation in the credit industry ... and to pay off and close the rest. Being associated with a 'secured' credit card account supposedly flags the cardholder as having credit problems, so even if it is your longest standing account I would think twice about keeping it open. Being associated with a high interest rate credit card from a 'subprime' lender isn't quite as negative, since at least this is a 'credit' account. In that regard WaMu and Capital One are probably a toss-up.

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    God/dess VenusGoddess's Avatar
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    Default Re: Pay off - should I close CCs

    Well, just because you close the card, it doesn't mean that you lose the credit history. It'll still be on your report for 5-7 years. Hopefully by that time your credit will be straightened out and you won't have to worry about it at all.

    You should always pay off the highest interest card first. Even if you are going to leave it open. Pay off the high interest and then the next high interest, etc.

  4. #4
    AudreyLeigh
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    Default Re: Pay off - should I close CCs

    oooooooooook. Duh. That makes sense... so close all and Ill keep the WaMu.

    Mel - I thought there was no difference in secure/unsecure when it comes to CR. Like theres no way to know...?

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    God/dess britneyireland's Avatar
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    Default Re: Pay off - should I close CCs

    I would keep them open. Why cut yourself off to lines of credit? Just don't charge anything on them and pay it off in full monthly if you do. I haven't closed my "secured" card that I got 2 months after my Chaper 7 was discharged in 2002 b/c it shows that I have credit history of paying my bills on time. It hasn't affected my score that is now in the mid 700s.
    Rebecca Avalon







  6. #6
    AudreyLeigh
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    Default Re: Pay off - should I close CCs

    The only reason Id get rid of the credit lines is because too many credit lines with very low limits can be bad too, or at least thats what I thought. And even tho the one was the 2nd highest limit it was costing $252 a year just to have the card even if I never use it! And Im scared of Cap1. Im afraid Ill all of a sudden have fees with them or something. I need to look over my paperwork I got from them when I opened the cards.

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    God/dess Deogol's Avatar
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    Default Re: Pay off - should I close CCs

    Quote Originally Posted by AudreyLeigh View Post
    The only reason Id get rid of the credit lines is because too many credit lines with very low limits can be bad too, or at least thats what I thought. And even tho the one was the 2nd highest limit it was costing $252 a year just to have the card even if I never use it! And Im scared of Cap1. Im afraid Ill all of a sudden have fees with them or something. I need to look over my paperwork I got from them when I opened the cards.
    yea.

    fuck that 252 a year card.

    close that fucker.

  8. #8
    PhillyDancer1982
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    Default Re: Pay off - should I close CCs

    Quote Originally Posted by AudreyLeigh View Post
    I know not to close CCs because it lowers your available credit. BUT Ive been really looking at my cards. First Ill say theyre ALL sub prime because of my Ch 7 bk but Im slowly building my credit back up. Im making $2000 at the end of the month and will pay 1 card off. The others one a month until theyre done. This is the order Im thinking to pay off. Tell me if any changes should be made. Thanks.

    WaMu. $1300 limit currently @ 0% 6 mo intro. I dont know what the interest rate is. Im searching the website now. This one was opened in October. I think I should pay this one first to avoid interest.

    The next one is a very high interest 23.99% and also has a monthly fee 10.95 and a yearly fee 119.95. I didnt read the fine print when I opened it. This ones a no brainer. It was a $850 limit but I already closed it. Yearly fee will be charged in April. Im thinking this should be #2 paid off (in March)

    #s 2-3 are my Cap 1 accounts. $300 and $500. Interest rate 19.15%. I dont know if theres a yearly fee and/or what it is. I dont think there is one.

    Orchard Bank. Secured Card. This card I got 2 months after my Ch 7. Ive had it over 2 years and its only a $200 limit and is @ 17.95%. I really think i need to keep this one because its my entire credit history but should I send them more money to make the available credit more? Maybe like another $1000?
    First, I want to give you kudos for paying off your credit card balances. I hope you see a nice surge in your Fico score as a result! You have the right idea to pay off the cards in the order of their interest rates, from highest APR to lowest. However, what is the interest rate on the Washington Mutual once the promo 0% APR runs out? I'm guessing it is less than your other cards(judging by the solicited offers I keep receiving from those guys...but please correct me if I'm wrong). Therefore, it would be in your best interest to pay the other cards before you pay off the Washington Mutual card.

    You should find out what the fees are for each card, such as the CrapitalOne cards. I believe CrapitalOne generally charges a $60/yr fee, unless it is a student card(there's no fee on that one). I could be wrong, but Orchard Bank generally charges a $60 fee too(I had a card with them 4 yrs ago, but maybe your card is different).

    Just curious Audrey, what is the name of the horrible card with all those huge fees? Is it First Premier or Aspire? If so, ugh I hate those guys because of all the fees they charge! Never had a card with them though, just got a bunch of really shitty offers from them all the time a few yrs ago when my credit score was low.

    Quote Originally Posted by AudreyLeigh View Post
    My plan is to keep the WaMu card because its the highest limit and the Orchard Bank because that one Ive had the longest.
    I agree that it is wise to keep the Washington Mutual card open.

    As for the Orchard Bank card, I agree with Melonie that perhaps this one should be closed. Unsecured cards look better on your credit report than secured cards. Also, I read that Orchard Bank doesn't even give credit limit increases until a whopping 18 months after opening the account!...that's too stingy. It is true that you've had the Orchard Bank card the longest, but how much longer than the others? If it was only a few months prior to your other cards, then I don't think those few months will matter much in the long run(or even now, since it's already been >2yrs since your bankruptcy, right?). So consider these things when deciding which card you'd want to close.

    Quote Originally Posted by AudreyLeigh View Post
    Should I close both the Cap1 accounts along with the one I already closed? How much of a hit will my CR take to close 3 CC accounts within a couple months time? Should I space them out? Will it matter? I know theyre just small limits but all together thats $1650 in available credit and leaves me with $1500 in available...
    Honestly, I'd leave the Capital One cards open for now, because YES your credit will take a hit if you close 3 cards in such a short period of time. Three cards = more than half of the credit cards you have to your name...that's a significant amount of closures. I'd space them out.

    Actually, I read an article on bankrate.com(a great website for money or credit tips, BTW) that said that it doesn't hurt you to have a lot of credit cards open, as long as you: a) pay them on time, b) keep the debt-to-credit limit utilization low. So I'd leave the CrapitalOne cards open for now. Maybe in about half a year, close out the card that has the lowest credit limit and/or highest annual fee(if there's any fee at all).

    Quote Originally Posted by AudreyLeigh View Post
    The only other things on my CR are my car and student loans which are both paid on time every month.
    It is good that you have loans of a substantial size, such as a car loan. When I got my $27K car loan, my credit score shot way way up after the first half year of making payments, because it showed that I was capable of handling a LARGE debt, not just a $300 balance on a credit card. Also, it is good because Fico gives you extra points for having a good variety of different credit types. So I applaud you for having the car loan and student loan! It sounds like you are doing a good job reestablishing your credit!

  9. #9
    PhillyDancer1982
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    Default Re: Pay off - should I close CCs

    Quote Originally Posted by AudreyLeigh View Post
    And Im scared of Cap1. Im afraid Ill all of a sudden have fees with them or something. I need to look over my paperwork I got from them when I opened the cards.
    Yes CrapitalOne is a sucky creditor to deal with, but HSBC is waaaaaay worse, according to my own (multiple) experiences with them and their Better Business Bureau complaint profile. Orchard Bank is a branch of HSBC. Yet another reason why you'd probably be better off closing the Orchard Bank card than the CrapitalOne cards.

    I do disagree with Melonie somewhat that you should close off all cards but one. I closed almost all of my credit cards about 3 yrs ago, and it was the easiest 100 pt plummet I've ever experienced with my credit score!! (yikes!) Perhaps you could close out all but 1 gradually, kinda phasing them out over a period of time? Also -- I already stated this in my other response -- I read an article that stated that it really doesn't hurt your credit that much by having multiple cards open, as long as the utilization is low and they're paid on time.

  10. #10
    Banned Melonie's Avatar
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    Default Re: Pay off - should I close CCs

    ^^^ the decision to keep multiple cards open is a function of the total line of credit available across all the cards, plus the 'expenses' of maintaining multiple card accounts (annual fees, identity theft protection fees etc.), plus the credit reporting / penalty interest rate policies / universal default policies of the (multiple) issuing banks. Personally I would recommend one and only one card with a low fixed interest rate, a high credit limit, and a 'reasonable' issuing bank - versus multiple cards with low credit limits, aggressive credit reporting / penalty interest rate / universal default policies, and 'difficult' issuing banks. Here's my reasoning ...

    Suppose a person has two credit cards ... each with say a $3000 credit limit, with universal default, with a hair trigger penalty interest rate etc. and something happens where that person needs to rack up $5000 in credit card charges in a hurry (to deal with an emergency, a car accident, being sick and out of work for a while, whatever). A. this will run the balance of both cards well above 50% of the credit limit, generating black marks on the person's credit report. B. both cards will require that minimum payments be made. C. if the person cannot afford to make both monthly payments, one card will report late payments thus generating another black mark on the person's credit report. D. if the card that was paid late has a hair trigger default policy, the interest rate on the late card may rocket from 14% to 21% plus. E. if the other card has a universal default policy, the interest rate on the other card may also rocket from 14% to 21% plus, based solely on the fact that the first card has issued a bad report to the credit reporting agencies although the other card was paid on time.

    On the other hand, if the same person had only one card with a $10k limit, none of the above bad stuff would happen. Running up a $5000 charge would not result in a yellow flag re the outstanding card balance exceeding 50% of the credit limit, or at worst would only run up one yellow flag instead of two. There would only be one minimum payment to make instead of two. There would be no late payment report, no triggering of penalty interest rates etc.

    PS I wouldn't deal with HSBC if my life depended on it. It's bad enough that Americans are racking up trillion dollar debts purchasing Chinese products. Paying high interest rates to a Chinese bank to enable some Americans to purchase Chinese products on credit only adds insult to injury.

  11. #11
    AudreyLeigh
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    Default Re: Pay off - should I close CCs

    Well, I guess I could close the HSBC card because its secured and only $200. I just hope they dont f*ck with me to get my $200 back.

  12. #12
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    Default Re: Pay off - should I close CCs

    Definitely close the one that's costing $250/year just to have. Pay off the highest interest first (no sense in letting large amounts of interest build up) and check your mail for new offers. Obviously throw most of them out, but there are a few good deals out there with 0% interest for awhile, low (er) interest after the intro period and no annual fees. Unless you want rewards of some kind, I don't think you should ever pay an annual fee!



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  13. #13
    AudreyLeigh
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    Default Re: Pay off - should I close CCs

    The one that was costing $250 a year is already closed but Im still being feed to death until I pay it off (in 3 weeks) @ $11/month and in April a $119 annual fee (on top of monthly) kicks in. So I have to pay it off but closed - yea, already did that!

    You know what else they did!? They gave me a limit increase from $500 to $850 and then charged $100 to the card as a fee for a limit increase! I didnt know about the charge and accepted the increase. I was so pissed.... Needless to say that card is done.

    I dont get offers in the mail. I signed up for the opt out program because it was way too tempting to accept offers so Ill just have to go with what I have and try to get increases to current credit lines and search for good cards I want since I wont be getting them in the mail.

  14. #14
    PhillyDancer1982
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    Default Re: Pay off - should I close CCs

    Quote Originally Posted by AudreyLeigh View Post
    Well, I guess I could close the HSBC card because its secured and only $200. I just hope they dont f*ck with me to get my $200 back.
    If you want my honest opinion, I'd say that you should expect HSBC to try and f*ck with you. I've been shafted by them on at least two occasions. It took consistent phonecalls, threatening, faxing proof of payments, calling Better Business Bureau(BBB), etc for SEVEN MONTHS for EACH of the 2 nightmares I had with them before they got things straightened out. They will make excuses and lies any way they can, they will feign innocence and claim that they already sent you the $200, etc...anything they can...but I doubt that a few more years of loyalty would have helped any, because they seem to screw almost everybody. If you persist, you will eventually get your money back. It's better to run away from them now than later.

    Here's just one of my 7 month long nightmares with them:



    I agree with Melonie about avoiding HSBC like the plague, not just because they are based in Hong Kong, but because of all the horrific experiences that so many people have had with them! They get THOUSANDS of customers filing complaints with the BBB against them! The only BBB profile I've seen with more complaints is Sprint, which was voted #1 worst service in an msn money article!

  15. #15
    God/dess britneyireland's Avatar
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    Default Re: Pay off - should I close CCs

    I have both a CRAPitalOne (tee hee I love that!) with a $500 for $39 annual fee and a Household Bank Card with a $1400 limit and a $49 annual fee. These were the first cards I opened up post bankruptcy. I keep 'em open and pay the small fee to have the 5 year credit history of good payments with them. Every year I call and ask them to bump up my limit..and they give me a hundred bucks here, hundred bucks there.....I find it quite ironic that I have four other real cards with 20K limits and 0 fees but CRAPitol one still views me as "risky"

    There's a good book called Credit After Bankruptcy by stephen snyder. I followed all the steps and slowly got myself out of the credit hole I dug in my early 20s.
    Rebecca Avalon







  16. #16
    PhillyDancer1982
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    Default Re: Pay off - should I close CCs

    Yeah I found that CrapitalOne is very stingy on credit limit increases and things. Did I say stingy...what I meant to say is cheap. Cheap in the same sense that a nontipping customer is cheap. They gave me a $29 overlimit fee for going only fifty cents over my credit limit. That is retarded. Most credit card companies will waive the fee if you do not frequently incur overlimit fees, because they realize how ridiculous the fee is over a mere fifty cents, and they want to save your business. But CrapitalOne doesn't care. I think the reason they do not care is because they purposely cater to bad credit people, so they assume that all of their customers have such shit credit that they're not able to get a replacement credit card if they wanted to. They figure that most of the customers have no choice, so that's how they get away with their usurious tactics.

  17. #17
    AudreyLeigh
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    Default Re: Pay off - should I close CCs

    I remember reading that story Philly - I paid the $200 with a cashiers check from my bank so I can go and get proof of that if they try to f*ck with me!


    Thanks for the book referral Britney - Ill go get that book today!

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