credit card question

[Ryan410]

My current credit situation:

Capital One Platinum: $750 Limit / 19% / $0 Balance
Best Buy HSBC: $1000 Limit / %0 / $150 Balance

I want to increase my credit limit. Not because i need to spend the money but because i want to increase my overall credit to lower my monthly usage % of the capital one card.

I have had the capital one card since I was 18 (now 21) and have never recieved a limit increase. I have never missed a payment and I pay my balance in full every month.

Should i ask for a limit increase from capital one or should i seek out an additional card, possibly a rewards card?

[minnie1928]

You say that you've had the card for 3 years, but have you used the card over this time? Capital One may be willing to up your credit line if you've shown them that you can use the card responsibly. I would try to get Capital One to up the limit before I applied for a new card. If you are planning to do something major (new car, mortgage), getting a new card might actually hurt your credit score because you will have a new account on file that will drag down your average card history length.

[disneysteve]

It can't hurt to ask for a higher limit. Before doing that, though, I would pay off the Best Buy card and close that account. Write them a check today for the balance. Once it posts, call and cancel the card. Check back with them in 60 days to be sure it was closed. Pull your credit report in 90 days and make sure it was reported as closed. Then call Capital One. Without that $1,000 Best Buy line on your report, you probably have a better shot at getting Capital One to raise your limit.

[Ryan410]

You say that you've had the card for 3 years, but have you used the card over this time? Capital One may be willing to up your credit line if you've shown them that you can use the card responsibly. I would try to get Capital One to up the limit before I applied for a new card. If you are planning to do something major (new car, mortgage), getting a new card might actually hurt your credit score because you will have a new account on file that will drag down your average card history length.

yes i have used the card over the entire period of time that i have owned it. usually around $200a month paid off in full each month.

debt I currently have:
mortgage of $100,000 at 5% fixed
Auto Loan of $7000 at 6%, 4 years remaining (plan to have paid off by the end of 2011)
Best Buy CC of $150 at 0% (will be paid off next pay period)

no plans to add any new debt so immediate score not a big issue.

[Ryan410]

It can't hurt to ask for a higher limit. Before doing that, though, I would pay off the Best Buy card and close that account. Write them a check today for the balance. Once it posts, call and cancel the card. Check back with them in 60 days to be sure it was closed. Pull your credit report in 90 days and make sure it was reported as closed. Then call Capital One. Without that $1,000 Best Buy line on your report, you probably have a better shot at getting Capital One to raise your limit.

If i canceled the Best Buy card that would hurt my score no? closing an account/lowering credit.

i am in no hurry to get a credit increase as i dont need the available credit for any reason other then convience/piece of mind/lower % of total credit used each month...

[disneysteve]

If i canceled the Best Buy card that would hurt my score no?

Yes, but only a little and only temporarily. Better to have it off your records going forward. In the future, avoid signing up for store cards just to get a one-time discount on your purchase or 0% financing.

[Ryan410]

Yes, but only a little and only temporarily. Better to have it off your records going forward. In the future, avoid signing up for store cards just to get a one-time discount on your purchase or 0% financing.

excuse my lack of knowledge on a possibly simple question but why are these type of cards a bad thing to have? if im buying things a couple of times a year in the store, paying the card off in full, and recieving rewards for my purchases it seems like a win win to me.

obviously if i was carrying a balance with this cards insane intrest rate it would be an issue...

[jpg7n16]

yes i have used the card over the entire period of time that i have owned it. usually around $200a month paid off in full each month.

debt I currently have:
mortgage of $100,000 at 5% fixed
Auto Loan of $7000 at 6%, 4 years remaining (plan to have paid off by the end of 2011)
Best Buy CC of $150 at 0% (will be paid off next pay period)

no plans to add any new debt so immediate score not a big issue.

I'm gonna have a rare verge from my standard practice of agreeing with everything DS writes


I would pay off the Best Buy card as slow as possible, and focus my money on the auto loan instead.

And I wouldn't close the Best Buy card, if you're going to continue to shop there anyways and you get rewards for it. (as long as the purchase fit in your budget) - And I would say that in the future, you should save up cash before you make the next Best Buy purchase.

But long as the card's at 0% (and there's no 'gatcha' clause where they can shift that to 25% on a whim), I would even save up for the purchase, but then not pay off the card. I'd put my 'TV money' towards the car. (and effectively shift some of my 6% debt to 0%)

I'm all about interest rate maximization - so I just can't get myself to tell you to accelerate payments on a 0% card. I just can't do it!

[disneysteve]

excuse my lack of knowledge on a possibly simple question but why are these type of cards a bad thing to have? if im buying things a couple of times a year in the store, paying the card off in full, and recieving rewards for my purchases it seems like a win win to me.

obviously if i was carrying a balance with this cards insane intrest rate it would be an issue...

If you are not charging more than 20-30% of the credit limit, pay your bill in full every month and get rewards for the purchases, then I'd retract my earlier advice.

What I don't think is a good idea is getting a card just to get a one-time discount or 0% financing on a one-time purchase.

[disneysteve]

I'm gonna have a rare verge from my standard practice of agreeing with everything DS writes

Not really a disagreement, as you'll see from my last post.

I think the problem is that many people (not including OP apparently) fall for the 0% offers or the cashier point-of-sale appeal to get a store card and save 15% on today's purchase.

As for the 0% deals, you can often negotiate your way through those. Talk to a manager and offer to pay cash upfront instead of 0% financing in return for a 10% discount on the purchase price. 0% financing isn't really free. It costs the company money. I know that and they know that. They price the merchandise accordingly. So use that knowledge to talk the price down if you pay cash.

That will work better at some stores than others. Stick with stores where the sales staff is commissioned rather than salaried. For example, Best Buy staff doesn't work on commission. HH Gregg staff does, so they are more likely to negotiate to make a sale. You have more wiggle room with them.

Many furniture stores even come right out and say 0% financing or 10% discount for cash.

[Ryan410]

so it seems it would still be better to seek a limit increase on the capial once card rather then a new card even though the current card recieves no rewards?

as for what your saying about the point of sale cards offered a every retailer these days, i agree... i used to hate having to solicit every customer for these cards when i worked retail... the discount was minimum, the intrest rates were insane, and i knew half the people being approved would be paying minimum payments...too many people fall for the save a little now spend more in the long run...

[disneysteve]

so it seems it would still be better to seek a limit increase on the capial once card rather then a new card even though the current card recieves no rewards?

Actually, I wouldn't use a credit card that didn't pay rewards.

If you have a good credit score and your current debt to income ratio is good, go for a good rewards card and stop using the Capital One card entirely.

[JoshuaHeckathorn]

I don't know exactly what your FICO Score is, but I'm guessing it's pretty good based upon the info. you've given here. I would apply for a new rewards credit card and start using the Cap One card less.

[Hector]

You say that you've had the card for 3 years, but have you used the card over this time? Capital One may be willing to up your credit line if you've shown them that you can use the card responsibly. I would try to get Capital One to up the limit before I applied for a new card. If you are planning to do something major (new car, mortgage), getting a new card might actually hurt your credit score because you will have a new account on file that will drag down your average card history length.

I think, there will be a credit inquiry regardless OP asks capital one to increase limit or apply for new card.

I would ask capital one to increase my limit. And if it doesnt happen, I would go ahead and apply for new credit card. In my exp, citicards offer highest credit limit with good reward cards to choose from. I would apply for a reward card from citi.

[Hector]

It can't hurt to ask for a higher limit. Before doing that, though, I would pay off the Best Buy card and close that account. Write them a check today for the balance. Once it posts, call and cancel the card. Check back with them in 60 days to be sure it was closed. Pull your credit report in 90 days and make sure it was reported as closed. Then call Capital One. Without that $1,000 Best Buy line on your report, you probably have a better shot at getting Capital One to raise your limit.

I agree in closing Best Buy card. I prefer not to have store credit cards.
Without Best Buy line, why would there be a higher probability of getting raise in capital one limit?