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Swoop003

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Closing a secured card
I recently opened a Wells Fargo secured card with a $1000 limit. Within 3 months of opening the card, I experienced some financial hardships. Needless to say, my available credit is less than $25.00. My question is should I close this card because the low available credit has caused my score to drop approximately 60 points. I do not see my ability to pay much on this card in order to get the utilization rate to fair amount anytime soon.

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Credit score/profile aside, generally with a secured card, it makes very little financial sense to carry balance, because you are paying interest on your own money. In your case, you are in bit of financial difficulty, if you can not pay it down/off in reasonable amount of time? Why take a chance that you might miss a payment or going over the limit, paying extra fees and possibly going into default, with your own money no less! What sense would it make?...Now, I don't know exactly how it work on secured card with balance but If you are able to use the deposit to pay the balance off, so that account closed in good standings? I would seriously consider it, I am just isn't 100% sure if you can do it or your account need to be in default first.

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You most likely will only see it drop more.  Firstly they will continue to report the amount owed, until it is payed. Second closing the account might might avaiable drop, while still keeping the amount owed will make the percentage of avaiable to owed even worse. As well as closing could affect some scoring models as they only use open accounts for age of credit.  Keep paying on it, keep it open, and the score will go up, is my advice. There maybe others that will have different information, but I doubt it.

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I agree with Nomadre, keep the account open.

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