YAC(redit)T

[dabuddha]

For all the credit gurus

Situation:

I just paid off all of my debt 2 years ago. My credit history was horrible and I decided it's high time to start fixing it. I finally signed up for a secured visa card about 10 months ago with a credit limit of $300. 2 months after that (8 months ago)I got two capital One credit cards, one business, one regular with a credit limit of $200 each with an annual fee.
Capital one increased my credit limit on the personal card to $300 and about a month ago, they increased my credit limit on my business card to $500. I pay off all bills in full every month so I never pay interest.
The question is, I just received an offer to open up a Capital One rewards card with a max credit limit of $2000, min $200 and no annual fee.
I was thinking of signing up for this and closing the $300 capitalone card. Mainly because this one has no annual fee. Is this a good idea or not? Currently I only have the 3 cards on my credit history right now.

TIA


EDIT: To clarify the new offer, it's a minimum credit line of $200, not a minimum balance requirement.

 

[kyparrish]

no! stop while you're ahead. Keep what you have, and keep the balances low, and pay on time!

 

[dabuddha]

Originally posted by: kyparrish
no! stop while you're ahead. Keep what you have, and keep the balances low, and pay on time!

That was my other train of though. I remember reading somewhere it'll be bad if I close an account and open up another one. I was just tempted by the "no annual" fee part

 

[Vic]

I wouldn't simply because of the minimum $200 balance requirement. Don't incur debt simply for the sake of having a credit score. The best way to manage credit cards and your credit score is to use your card every month for regular purchases, and then pay it off in full every month. Over time, your creditors will beg you to raise the limits (because they want to trap you into more debt -- don't fall for that, just take the limit increases).

edit: it's not necessarily bad to open up new accounts, just as long as you don't open more than a couple each year. Old accounts you should just leave open as long as you can get with as long as there is no annual fee.

 

[Kishan]

Sorry to threadjack, but I just used FreeCreditReport.com. Two things:

1. It said I had a 743. Is this the same scale as FICO? Any good? I'm 18, have one credit card and a student loan.

2. Did FreeCreditReport.com put an inquiry on my credit? That wouldn't be good I would imagine.


Thanks,
Kishan

 

[conjur]

Originally posted by: Vic
I wouldn't simply because of the minimum $200 balance requirement. Don't incur debt simply for the sake of having a credit score. The best way to manage credit cards and your credit score is to use your card every month for regular purchases, and then pay it off in full every month. Over time, your creditors will beg you to raise the limits (because they want to trap you into more debt -- don't fall for that, just take the limit increases).

Exactly. Carrying a *minimum* balance? Screw that.

edit: it's not necessarily bad to open up new accounts, just as long as you don't open more than a couple each year. Old accounts you should just leave open as long as you can get with as long as there is no annual fee.

Ayup. Keeping those accounts open keeps your total available credit higher which will typically help keep your utilization lower and, thus, increase your FICO score.

 

[kyparrish]

Originally posted by: conjur

Originally posted by: Vic
I wouldn't simply because of the minimum $200 balance requirement. Don't incur debt simply for the sake of having a credit score. The best way to manage credit cards and your credit score is to use your card every month for regular purchases, and then pay it off in full every month. Over time, your creditors will beg you to raise the limits (because they want to trap you into more debt -- don't fall for that, just take the limit increases).

Exactly. Carrying a *minimum* balance? Screw that.

edit: it's not necessarily bad to open up new accounts, just as long as you don't open more than a couple each year. Old accounts you should just leave open as long as you can get with as long as there is no annual fee.

Ayup. Keeping those accounts open keeps your total available credit higher which will typically help keep your utilization lower and, thus, increase your FICO score.

I think the OP meant that the minimum credit limit of the card would be $200...not that he would need to carry a minimum balance on the card....

 

[conjur]

Originally posted by: KPSHAH316
Sorry to threadjack, but I just used FreeCreditReport.com. Two things:

1. It said I had a 743. Is this the same scale as FICO? Any good? I'm 18, have one credit card and a student loan.

It's a FAKO (fake score...may be +/- 100 from your real http://www.myfico.com score.

2. Did FreeCreditReport.com put an inquiry on my credit? That wouldn't be good I would imagine.

Nope. You can check your own credit any time you want and it won't ding you. I check mine every day via http://www.privacyguard.com.

 

[TuxDave]

Well... it's a little too late, but I would've avoided anything with an annual fee in the first place. Maybe if your credit score has improved since opening it, you can ask to remove the annual fee on your existing credit cards or you threaten to close the account.

 

[conjur]

Originally posted by: kyparrish

Originally posted by: conjur

Originally posted by: Vic
I wouldn't simply because of the minimum $200 balance requirement. Don't incur debt simply for the sake of having a credit score. The best way to manage credit cards and your credit score is to use your card every month for regular purchases, and then pay it off in full every month. Over time, your creditors will beg you to raise the limits (because they want to trap you into more debt -- don't fall for that, just take the limit increases).

Exactly. Carrying a *minimum* balance? Screw that.

edit: it's not necessarily bad to open up new accounts, just as long as you don't open more than a couple each year. Old accounts you should just leave open as long as you can get with as long as there is no annual fee.

Ayup. Keeping those accounts open keeps your total available credit higher which will typically help keep your utilization lower and, thus, increase your FICO score.

I think the OP meant that the minimum credit limit of the card would be $200...not that he would need to carry a minimum balance on the card....

Ah...probably so.

I'd probably still skip it. Not much sense having 5 cards all with low CLs.

 

[Vic]

Originally posted by: KPSHAH316
Sorry to threadjack, but I just used FreeCreditReport.com. Two things:

1. It said I had a 743. Is this the same scale as FICO? Any good? I'm 18, have one credit card and a student loan.

2. Did FreeCreditReport.com put an inquiry on my credit? That wouldn't be good I would imagine.


Thanks,
Kishan

1. It's good, but meaningless. It's what is known as a "mini-FICO", i.e. a score based on a short-term payment history with only 1 or 2 accounts. Keep up the good work but you can't get a house just yet

2. No, they didn't put an inquiry on your report, as you were the one requesting the pull for your own personal use. However, the effect of inquiries on credit reports is grossly overrated. It is the smallest percentage of your score, and a couple or a few inquiries per year will not affect your score.

 

[Kishan]

thanks vic and conjur!

 

[dabuddha]

Originally posted by: Vic
I wouldn't simply because of the minimum $200 balance requirement. Don't incur debt simply for the sake of having a credit score. The best way to manage credit cards and your credit score is to use your card every month for regular purchases, and then pay it off in full every month. Over time, your creditors will beg you to raise the limits (because they want to trap you into more debt -- don't fall for that, just take the limit increases).

edit: it's not necessarily bad to open up new accounts, just as long as you don't open more than a couple each year. Old accounts you should just leave open as long as you can get with as long as there is no annual fee.

Sorry I wasn't clear. I meant that the minimum credit line is 200 and the max is 2000

 

[dabuddha]

Originally posted by: TuxDave
Well... it's a little too late, but I would've avoided anything with an annual fee in the first place. Maybe if your credit score has improved since opening it, you can ask to remove the annual fee on your existing credit cards or you threaten to close the account.

Ahh I wasn't aware I could do that. Perhaps I'll try that first.

 

[dabuddha]

Any other advice before I call capitalone and ask to have my annual fee removed? If they don't do it, should I close the card then or just pay it?
It's "renewal" is coming up in March/April

 

[Vic]

Originally posted by: dabuddha
Any other advice before I call capitalone and ask to have my annual fee removed? If they don't do it, should I close the card then or just pay it?
It's "renewal" is coming up in March/April

If they give you the "NO" treatment , just tell them that you won't be renewing and pay off the balance of the card in full.