Jump to content

Getting rid of the sub-prime cards

Recommended Posts

I have had major improvements to my credit in the last year and now I'm wondering if it's time to kill my sub-prime cards (CrapOne and Orchard). I'm just not sure if it's too soon as my new/improved credit history is short (since I opened the Orchard account in 2/07). Should I wait until I reach the two year anniversary or can i cancel now (thus avoiding any additional annual fees)? I don't mind a temporary dip in scores, but I don't want to do anything really detrimental.

Here's my status:

Credit Scores as of 10/2/08

TU - 770

EQ - 741

Ex - 703

Active Credit Cards

HSBC/Orchard ($300) – opened 2/1/2007

Capital One ($500) – opened 4/1/07

Bofa Visa ($6,000) – opened 10/13/07

Bofa Amex ($20,000) – opened 8/1/2007

Amex Blue ($10,000) – opened 10/13/08

Any help is appreciated.



Link to comment
Share on other sites

As I've said many times here, I cannot tell you the freedom (emotional) that you will experience when you dump these cards. Additionally, you will reap financial rewards when you stop paying their fees. Subprime cards serve their purpose in rebuilding (trust, me I had three of them) but when you get a prime card - and usually, most people get more than one in their first app spree - you no longer have need for your subprime cards. Fire them. Their age will still contribute to your score, even though they are closed.

And do not have any fantasies that the FPs and Orchards of the world will give you any significant CLIs, reduce your fees, or interest rates. That's not what they're about. FP will give you a $150 CLI and charge you $25 for it.

Link to comment
Share on other sites

One other thing that even I've only begun to fully realize:

Your credit limits are determined by your OTHER credit limits, NOT your credit score! Yes, your score has to be ballpark, but the limits on your open accounts tell creditors how much to give you and the kind of numbers that are relevant to your life.

The same cards by the same banks are giving other people 10k, 20k, even 50k limits simply because that's what their other cards have, and with 650, 675, 700 fico scores.

Link to comment
Share on other sites

I'm with you guys on this entire thread. It's true that banks will look at other comparable credit limits on your report when they are issuing credit limits. Even with a 771 my credit union would only give me $2500 which is a few hundred higher than a Merrick Visa I have. They specifically said that they would not go much higher than my other limits.

I also still have an Orchard and a Household card that I've been scared to fire because I didn't want to bring down the average age of my accounts, but I read a few posts above that they still contribute to average age even when closed.... is this true? That would be sweet.


Link to comment
Share on other sites

This topic is now closed to further replies.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.