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Question By
Dylandemarco

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Should i cancel my secure card for a unsecure card
I recently opened a secure credit card threw bank of america with a credit line of 500$. (I had to pay the 500 as collateral). About 3 weeks after i opened this card my bank contacted me and said they had further reviewed my case and was offering me a credit card with no annual fee and lower rates with all the same positives of my secure card. So i took the offer thinking that in the long run it would make sense. So my question is, Should I close the secure card now after only a month of having it open?(i was charged the annual fee). Or should i keep it open for 10 or so months and use two cards, and then cancel it before i am charged again?

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The general advice for optimal scoring is to have at least 2-3 cards.  If you have that number of unsecured cards then consider closing your secured cards.

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Since you've paid the fee

Use it for at least a year. Closing it right away might have a far more negitive effect. Creditors don't like to see accounts opened then closed right away.  They lose the cost of the processing and if you don't keep the account, they don't have a chance to make anything off of you. They don't like that.  

I suggest that you use the card, keep the balance below 50 percent of limit and pay off at least 75% each month.  About 9 months from now, pay off completely and stop using it.  Keep using the other card and keep utilization below 30% and you should be receiving approved credit card offers in the mail.

At 11 months, apply for a pre-approved credit card. Look over the offers you get in the mail and choose the one that offers the best interest rate and perks. 

Don't apply for new credit more than once every 6 months and only when your score is at it best. 

And Remember, A great credit score is not about how much you have, it's about how you manage it. 

Good luck 

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Reply by
EddyTX

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I forgot to mention,  Once you have that second card, then you can close the secured card. if you are denied,  You will need to keep it for a second year to help your score, it would be worth the cost of the annual fee to keep it.

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