A year later with Capital One secured credit card: How do I get my $1000 back?

[gozu]

Hi folks,

 

360 days ago, I opened a secured credit card with capital one to rebuild/repair my poor credit with a $1000 deposit. I've always paid it on time and today I just received a pre-approved offer from them.

 

I only currently have their secured mastercard and an american express charge card so I figured it'd be good for my score if I got another credit card. I called them to see if I could convert my secured credit card (credit limit was $1000 a year ago, $1450 now) into an unsecured credit card but they said they don't do that.

 

How should I go about getting my Grand back without hurting my credit? Should I sacrifice a goat? If so, what words should I chant as I'm doing it?

 

I would appreciate the advice.

 

Thank you!

[dockworker]

I would make sure you get that other card first, then cancel the secured card. It's the only way you'll get your deposit back. Yeah, closing the account will affect your average age of open accounts, big deal.

[jonson]

I would recommend keeping it longer. Is there a reason you want your $1,000 back?

 

I don't think you're ready to close. It sounds like you just want your money back and don't want to pay your annual fee. If you're serious about building/rebuilding, you need to make the commitment to keep the card open as long as you necessary. I would bet money that Capital One will approve you for a small $500 to $1,000 unsecured credit card. Personally, I wouldn't waste your time. Your secured card will grow faster if you add money to the deposit.

 

Lastly, if you do decide to close the account anyway, I highly recommend increasing the security deposit to it's maximum ($3,000) before you close, that way, a $3,000 limit card will report to the CRAs. You will get your money back a few weeks after closing.

[jonson]

I know I may be conservative, but I am keeping my Capital One secured card, and I have a $10,000 Navy Federal credit card, plus I was just approved for the Amex Preferred Gold. However, I still feel like I am rebuilding and need the age. Many of my older accounts are falling off, and my secured card is the oldest (open) reporting card at the moment. $24/year and them holding my deposit is a small price to pay while I establish myself more.

[dockworker]

Its not just the AF but he is getting garbage interest in that $1k. I'd rather invest it somewhere else. That's literally worth more than maybe dropping some points in the short term.

 

Sent from my Nexus 5 using Tapatalk

[Tabithaaa]

A closed account in good standing will remain on your report as positive history for up to 10 years. The AAOA hit will not be immediate. If you have an Amex charge card - you are no longer rebuilding. Cancel capital one and get your $1000 back.

[funkiehouse]

I would recommend keeping it longer. Is there a reason you want your $1,000 back?

 

I don't think you're ready to close. It sounds like you just want your money back and don't want to pay your annual fee. If you're serious about building/rebuilding, you need to make the commitment to keep the card open as long as you necessary. I would bet money that Capital One will approve you for a small $500 to $1,000 unsecured credit card. Personally, I wouldn't waste your time. Your secured card will grow faster if you add money to the deposit.

 

Lastly, if you do decide to close the account anyway, I highly recommend increasing the security deposit to it's maximum ($3,000) before you close, that way, a $3,000 limit card will report to the CRAs. You will get your money back a few weeks after closing.

 

+1 I would keep it open as well in your situation. If you can you would at least want to keep it until all new cards have reported 6 times. If there is an AF call the EO line and ask for it to go away.

[funkiehouse]

I would make sure you get that other card first, then cancel the secured card. It's the only way you'll get your deposit back. Yeah, closing the account will affect your average age of open accounts, big deal.

 

When you're rebuilding it's a very big deal when it comes to getting additional credit within 6-18 months.

[mendelssohn]

It won't effect AAOA, but it will effect AAOOA. I think it's in your best interest to keep it open for a while until you have more seasoned accounts.

[dockworker]

 

I would make sure you get that other card first, then cancel the secured card. It's the only way you'll get your deposit back. Yeah, closing the account will affect your average age of open accounts, big deal.

 

When you're rebuilding it's a very big deal when it comes to getting additional credit within 6-18 months.

 

 

If your goal is to to open multiple cards with excessive credit limits as fast as possible, then yes it will be a very big deal and one should take your advice. If your goal is to establish great credit and build a nest egg for emergency fund or improve your retirement funds, take my advice.

 

The thought of having $1000 just sitting there getting horrible return rates makes me cringe a little

[Occam]

I would recommend keeping it longer. Is there a reason you want your $1,000 back?

 

I don't think you're ready to close. It sounds like you just want your money back and don't want to pay your annual fee. If you're serious about building/rebuilding, you need to make the commitment to keep the card open as long as you necessary. I would bet money that Capital One will approve you for a small $500 to $1,000 unsecured credit card. Personally, I wouldn't waste your time. Your secured card will grow faster if you add money to the deposit.

 

Lastly, if you do decide to close the account anyway, I highly recommend increasing the security deposit to it's maximum ($3,000) before you close, that way, a $3,000 limit card will report to the CRAs. You will get your money back a few weeks after closing.

Superb advice!

 

If you got a pre-approval, take it. Try to get at least 4 (total) unsecured accounts open before before you close the secured one.

 

Keep the secured card until its 2nd anniversary and close it just before the AF comes due.

 

And, as Jonson says, raise the security deposit & CL to the max possible just before you close it. A $3000 account with 24 months history looks way better than a $1000 account with just 12 months history. And it's going to be on your reports for 10 years.

 

Getting that Amex card opened early was the best idea ever!

[jonson]

I want to know where you're going to get a huge return on $1,000, versus rebuilding credit which has the potential to SAVE you a ton of money when you get lower interest rates.

 

 

 

Getting that Amex card opened early was the best idea ever!

 

 

My thinking was: My credit is at a point where I have a decent chance of being approved... And if I ever F-up my credit again, I have the ability to backdate with American Express. I've been losing a lot of sleep because I have a lot of accounts dropping off my credit reports because they are older than 10-years, so I'm trying to prevent this problem in the future.

[up&climbing]

I want to know where you're going to get a huge return on $1,000, versus rebuilding credit which has the potential to SAVE you a ton of money when you get lower interest rates.

 

 

 

Getting that Amex card opened early was the best idea ever!

 

 

My thinking was: My credit is at a point where I have a decent chance of being approved... And if I ever F-up my credit again, I have the ability to backdate with American Express. I've been losing a lot of sleep because I have a lot of accounts dropping off my credit reports because they are older than 10-years, so I'm trying to prevent this problem in the future.

 

Excellent long term thinking....I was just in this situation. There was a hiccup with EQ and they deleted 17 of my oldest accounts close to the 10 year mark. My AAOA dropped from over 5 years to 2.8 years and my score plunged! I got in touch with EQ and they reinserted my accounts but they will start falling off naturally again in Sept of this year. So I went and app'd for Amex and got backdated with 2 new cards. This was right in the nick of time for me and definitely a savior in my scores, so cudos to you for getting those Amex's because it really helps!

 

OP, I wouldn't close that card until that card was at least 2 years old. Think long term instead of short term benefits here. Yea you can get your $1K back and have that in your pocket now, but father time will eventually get you to that 10 year mark and you'll be in the same position as Jonson and I. And even now you've already taken the hit of the Cap1 card on your AAOA so why not just let it linger on until at least 2 years because that will look better on a manual review? You will eventually get one of these anyway.

 

I'm not sure about adding in additional deposits to increase the Cap1 limit since you already have Amex and can request regular CLI's. If you get your CL's up with Amex and then close Cap1 in 2 years then any new apps might consider matching at least what you have on Amex. At least that has been my experience on CC limits.

[funkiehouse]

I want to know where you're going to get a huge return on $1,000, versus rebuilding credit which has the potential to SAVE you a ton of money when you get lower interest rates.

 

 

I want to get in on that too.

[SmellyMonkey]

Could you ask the EO to convert it to unsecured but keep the card age?

[funkiehouse]

Could you ask the EO to convert it to unsecured but keep the card age?

 

Actually that's a good thought because the OP didn't mention if they spoke with the regular CSRs or the EO. Probably the first.

[gozu]

I spoke with a regular CSR. I found an email for the EO (assuming this means Executive Office that answers emails sent to the CEO). I'll try that. Can't hurt.

 

Thank you guys for the advice.There is no particular reason why I want to $1000 back. if an email to the EO doesn't help, I guess I'll keep it open and forget about the $1000 for a few years.

 

My experian credit score should be between 650 and 670 right now. Credit Karma rates me at 650.

 

Since several people said to avoid Capital One credit cards, do you have any suggestions on what card I should qualify for that I should get?

Edited March 29, 2014 by gozu

[jonson]

Could you ask the EO to convert it to unsecured but keep the card age?

 

That won't work. I tried that last year, citing that the product page stated at the time I applied that there would be credit line increases (plural), and I only received one. They told me that I would only receive one unsecured credit line increase and the product would not unsecure.

[haydeno]

Since you have an amex charge, you prob have a good- very good shot at an amex credit card. Close after you get another prime card or two or three.

[gozu]

Since you have an amex charge, you prob have a good- very good shot at an amex credit card. Close after you get another prime card or two or three.

I've only had my amex charge card for 5 months, though. Is that enough?

[Occam]

 

Since you have an amex charge, you prob have a good- very good shot at an amex credit card. Close after you get another prime card or two or three.

I've only had my amex charge card for 5 months, though. Is that enough?

 

No. You should open another Amex in January, not before and not after, because that will give you the best age.

 

Get 2 other unsecured cards now (you could wait till the Amex reports 6 full months but probably don't need to). Walmart would be good because it's easy, no AF, and gives you a free FICO monthly. The Capone starters aren't as bad as they used to be, because you have a very good chance of converting it to an AF-free Quicksilver in a year or two. Open the 2 on the same day

 

Then go for your 2nd Amex in January; that way it will boost your AAOA instead of dropping it. At that point you'd be in good shape for a spree... maybe another 3-5 good cards you'll want to keep. Barclays would be a good one to add at the same time. From then on it's Prime Time.

[gozu]

 

 

Since you have an amex charge, you prob have a good- very good shot at an amex credit card. Close after you get another prime card or two or three.

I've only had my amex charge card for 5 months, though. Is that enough?

 

No. You should open another Amex in January, not before and not after, because that will give you the best age.

 

Get 2 other unsecured cards now (you could wait till the Amex reports 6 full months but probably don't need to). Walmart would be good because it's easy, no AF, and gives you a free FICO monthly. The Capone starters aren't as bad as they used to be, because you have a very good chance of converting it to an AF-free Quicksilver in a year or two. Open the 2 on the same day

 

Then go for your 2nd Amex in January; that way it will boost your AAOA instead of dropping it. At that point you'd be in good shape for a spree... maybe another 3-5 good cards you'll want to keep. Barclays would be a good one to add at the same time. From then on it's Prime Time.

 

 

January 2015, eh? So 15 months after I opened the charge cards is the best age? I'll do it. (what's special about 15 months? Seems like an odd number.)

 

Walmart has a credit card and a Discover card. I'm assuming you're talking about the non-discover one? Any suggestion for another card to apply for in parallel to the Walmart one? Should I do those in the same day? (why is same day good, btw?)

[dockworker]

I want to know where you're going to get a huge return on $1,000, versus rebuilding credit which has the potential to SAVE you a ton of money when you get lower interest rates.

 

You're thinking about it entirely wrong. Looking at it that way, it's no wonder most people are poor during their retirement years, because they didn't plan properly for it. They sure enjoyed the two Lexuses in the driveway in a very large house they could barely afford, eating out/ordering in constantly throughout the week, accumulating poor financial decision after poor financial decision, like say, giving a credit card company a nearly interest free loan on $1,000 for a couple years.

 

A buddy of mine only makes $60k/year salaried (that isn't a lot for the large metropolitan area he lives in) and he'll retire by 40. He bought a used car that worked, he didn't live beyond his means, he found ways to enjoy life but save everything he could and make sound investments. People are making 4x that and will be struggling with retirement in their mid 60s. I won't retire at 40 but I expect to well before retirement age. I really wish I had this discipline years ago.

 

I get the point that a lower interest rate on a mortgage or car will come out ahead but eventually you hit the point where you already have the best possible prime rate. My question to anyone: besides feeling warm and fuzzy inside, what is the difference between of a credit score of 820 and 780?

 

I may be wrong but I think the floor for the best possible interest rate for most lenders is even lower than 780.

 

So, my advice to OP is this: If you're going to shop a car or a house very soon, keep it open until you close the deal and then put it with the rest of your savings, adding to the interest snowball working for you. I concede that I don't know what OP's spending and saving habits are, and my guess is that if he is a typical consumer, that $1,000 likely wouldn't be saved but consumed on something that would provide no benefit down the road anyway, making this moot.

 

Credit is an excellent tool but my main priority above all else is retirement: this includes investing and saving, in addition to trying to get the best interest rates via credit, but the bulk of it is going to come from what you put away and invest.

 

EDIT: forgot to mention that if OP has an Amex he likely isn't in rebuilding mode and depending on his utilization, closing the card wouldn't affect loan rates. And if he has any balance whatsoever, he'll come out ahead by taking that money and paying it all off.

 

EDIT 2: I read his other response with his scores, definitely not prime but my advice stands.

Edited March 29, 2014 by dockworker

[mendelssohn]

 

 

 

 

 

 

Since you have an amex charge, you prob have a good- very good shot at an amex credit card. Close after you get another prime card or two or three.

I've only had my amex charge card for 5 months, though. Is that enough?

No. You should open another Amex in January, not before and not after, because that will give you the best age.

 

Get 2 other unsecured cards now (you could wait till the Amex reports 6 full months but probably don't need to). Walmart would be good because it's easy, no AF, and gives you a free FICO monthly. The Capone starters aren't as bad as they used to be, because you have a very good chance of converting it to an AF-free Quicksilver in a year or two. Open the 2 on the same day

 

Then go for your 2nd Amex in January; that way it will boost your AAOA instead of dropping it. At that point you'd be in good shape for a spree... maybe another 3-5 good cards you'll want to keep. Barclays would be a good one to add at the same time. From then on it's Prime Time.

January 2015, eh? So 15 months after I opened the charge cards is the best age? I'll do it. (what's special about 15 months? Seems like an odd number.)

 

Walmart has a credit card and a Discover card. I'm assuming you're talking about the non-discover one? Any suggestion for another card to apply for in parallel to the Walmart one? Should I do those in the same day? (why is same day good, btw?)

It's because your new Amex cards will backdate to Jan 2013. Any Amex you open will show as being opened in 2013 and the month the "new" card is opened.

[Occam]

 

I want to know where you're going to get a huge return on $1,000, versus rebuilding credit which has the potential to SAVE you a ton of money when you get lower interest rates.

 

You're thinking about it entirely wrong. Looking at it that way, it's no wonder most people are poor during their retirement years, because they didn't plan properly for it. They sure enjoyed the two Lexuses in the driveway in a very large house they could barely afford, eating out/ordering in constantly throughout the week, accumulating poor financial decision after poor financial decision, like say, giving a credit card company a nearly interest free loan on $1,000 for a couple years.

 

A buddy of mine only makes $60k/year salaried (that isn't a lot for the large metropolitan area he lives in) and he'll retire by 40. He bought a used car that worked, he didn't live beyond his means, he found ways to enjoy life but save everything he could and make sound investments. People are making 4x that and will be struggling with retirement in their mid 60s. I won't retire at 40 but I expect to well before retirement age. I really wish I had this discipline years ago.

 

I get the point that a lower interest rate on a mortgage or car will come out ahead but eventually you hit the point where you already have the best possible prime rate. My question to anyone: besides feeling warm and fuzzy inside, what is the difference between of a credit score of 820 and 780?

 

I may be wrong but I think the floor for the best possible interest rate for most lenders is even lower than 780.

 

So, my advice to OP is this: If you're going to shop a car or a house very soon, keep it open until you close the deal and then put it with the rest of your savings, adding to the interest snowball working for you. I concede that I don't know what OP's spending and saving habits are, and my guess is that if he is a typical consumer, that $1,000 likely wouldn't be saved but consumed on something that would provide no benefit down the road anyway, making this moot.

 

Credit is an excellent tool but my main priority above all else is retirement: this includes investing and saving, in addition to trying to get the best interest rates via credit, but the bulk of it is going to come from what you put away and invest.

 

EDIT: forgot to mention that if OP has an Amex he likely isn't in rebuilding mode and depending on his utilization, closing the card wouldn't affect loan rates. And if he has any balance whatsoever, he'll come out ahead by taking that money and paying it all off.

 

EDIT 2: I read his other response with his scores, definitely not prime but my advice stands.

 

Nonsense, it's simple math and "looking at it differently" won't change the numbers. We are talking about $1000, not 100k.

 

Aside from that, you would be a fool to put your last $1000 into risky high yield investments. You need a safe, liquid emergency fund and you just have to live with the fact that it's not going to yield much. An insured savings account is a good place for part of it. And don't say it's not liquid. It's instantly available via the CL on the secured card, and available within a few weeks by closing the card. If the rest of your emergency fund won't last a few weeks the extra $1000 is moot anyway.