Will paying off and closing a secured card change my score?

Discussion in 'Credit Talk' started by sehnsee, Dec 19, 2015.

  1. sehnsee

    sehnsee Member

    I have a Capitol one SECURED card for $2500, it only has a balance of $200.

    My credit has since improved and I have about 5 unsecured cards. It's too many for me to deal with so I wanna close a few starting with the secured one.

    If I pay the balance to zero and then close it, will that reflect on my credit?
     
  2. jam237

    jam237 Well-Known Member

    Paying off WILL help; but CLOSING WILL NOT.

    Paying off the account drops the utilization to 0% (although keeping a small amount of activity would be recommended), CLOSING the account stops the account from benefiting you in the future. If you've had the account for 2 years, close it today, in 7 years, that account will disappear as if it has never existed. To the CRAs, they have no idea that it was a secured card, to lenders who view your credit report, they have no idea that it was a secured card. All they'll see is that $2,500 worth of credit disappeared.

    Now, there are other options... :)

    If any of your other cards is Capital One, you can merge the two accounts together. Pay the secured one down to zero, and then ask that they merge this account into another of your cards, now you've moved that available credit into another card, AND reduced the number of cards to juggle by one.

    If any of your other cards are from the same lender, you can see if they provide the option to merge the account, as well.
     
  3. sehnsee

    sehnsee Member

    So Capitol one will merge my secured card with the unsecured card? How would that work? Wouldn't they have to give me an additional limit to do that ?
     
  4. jam237

    jam237 Well-Known Member

    It's not giving you an additional limit, it's just adding the limits of card a & card b together onto card a. Card a ends up with a higher credit line, but your total available credit stays the same, it just is on a different card. The other card will still eventually fall off, but at least you're not leaving the credit limit on the table.
     
  5. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Sehnsee, did you end up contacting Capital One to see if they would merge credit limits for you? I've done this myself with several credit issuers, and I've never had a problem. Just curious how that worked out for you.
     

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