Personal Finance

Should I Close Capital One MasterCard?

  • Last Updated:
  • Dec 29th, 2020 12:48 pm
[OP]
Member
Oct 8, 2020
291 posts
425 upvotes
Ottawa

Should I Close Capital One MasterCard?

I'm currently in a consumer proposal, and about 6 months I got a secured Capital One MasterCard and put a $1,500 security deposit down. Earlier this month, I got a secured Collabria Visa through my credit union in which the security funds were put into locked account that accumulates interest. I also get cash back rewards on the Visa and pay no annual fee. I was told that in 1-year, my file will be reviewed and the security funds could be released back to me and the Visa becoming unsecured.

I've read negative things about Capital One such as interest not accumulating on the security funds, the card never becoming unsecured, not to mention paying an annual fee and not getting any rewards.

I'm trying to rebuild my rebuild my credit. Since the Capital One card is relatively new, does anybody think I could cancel it and recover enough from the hit? My pros list for cancelling the Capital One card is longer then the cons but I'd be happy to hear your thoughts and opinions.
7 replies
Sr. Member
Dec 22, 2007
969 posts
589 upvotes
Mississauga
I would say keep it for the year as maybe worthwhile to have another card just incase..
Deal Fanatic
User avatar
Aug 24, 2016
8559 posts
9287 upvotes
The Prairies
You actually obtained credit while in a Consumer Proposal?
I was under the impression one couldn’t do that?
Newbie
Jan 7, 2017
44 posts
35 upvotes
SenatorsFan wrote: I'm currently in a consumer proposal, and about 6 months I got a secured Capital One MasterCard and put a $1,500 security deposit down. Earlier this month, I got a secured Collabria Visa through my credit union in which the security funds were put into locked account that accumulates interest. I also get cash back rewards on the Visa and pay no annual fee. I was told that in 1-year, my file will be reviewed and the security funds could be released back to me and the Visa becoming unsecured.

I've read negative things about Capital One such as interest not accumulating on the security funds, the card never becoming unsecured, not to mention paying an annual fee and not getting any rewards.

I'm trying to rebuild my credit. Since the Capital One card is relatively new, does anybody think I could cancel it and recover enough from the hit? My pros list for cancelling the Capital One card is longer than the cons but I'd be happy to hear your thoughts and opinions.
my advice is to keep the card and use it for 10-11 months. Before the end of the 11th month apply for a second capital one credit card with a yearly fee. Capital one will approve the new card without security funds then you can cancel the one with security funds. sometimes capital one also increases credit limit without requesting additional funds. When rebuilding credit it's best to have at least 3 credit cards on record to build credit. Keep your utilization below 30% and signup for a free Borrowell account to monitor your credit score.
Newbie
Jan 7, 2017
44 posts
35 upvotes
coolintheshade wrote: You actually obtained credit while in a Consumer Proposal?
I was under the impression one couldn’t do that?
You can obtain credit under CP but most places will avoid giving you unless you have collateral, hence the security funds. Bankruptcy has some restrictions but not CP.
[OP]
Member
Oct 8, 2020
291 posts
425 upvotes
Ottawa
coolintheshade wrote: You actually obtained credit while in a Consumer Proposal?
I was under the impression one couldn’t do that?
You can obtain a secured credit card while in a consumer proposal. My trustee recommended I get a secured card 1-year into my proposal.
Deal Fanatic
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Aug 24, 2016
8559 posts
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The Prairies
abhinarula89 wrote: You can obtain credit under CP but most places will avoid giving you unless you have collateral, hence the security funds. Bankruptcy has some restrictions but not CP.
SenatorsFan wrote: You can obtain a secured credit card while in a consumer proposal. My trustee recommended I get a secured card 1-year into my proposal.
I guess I’m probably thinking bankruptcy, where you have to surrender all your credit facilities, even the ones that aren’t being included in the bankruptcy.
So if you had any credit cards that had zero balance, and weren’t being included in the CP, would you have been able to keep them, or do you have to surrender/close them off before the CP can happen?
[OP]
Member
Oct 8, 2020
291 posts
425 upvotes
Ottawa
coolintheshade wrote: I guess I’m probably thinking bankruptcy, where you have to surrender all your credit facilities, even the ones that aren’t being included in the bankruptcy.
So if you had any credit cards that had zero balance, and weren’t being included in the CP, would you have been able to keep them, or do you have to surrender/close them off before the CP can happen?
I've read and heard conflicting things. I had a credit card with a $100 balance that I wanted to keep. My trustee told me he didn't recommend me picking and choosing what debts to include because the whole point of a CP is to wipe the slate clean. He also said that even if I kept card with a $0 or low balance and not include it in the proposal, creditors are constantly checking your credit reports so once it was discovered that I was in a proposal then the card would be cut off anyways. With that being the case, the card with the $100 balance suddenly becomes $30. I was on authorized user on my dad's Tangerine MasterCard and I don't know how Tangerine knew but within a month they stopped letting me be an authorized user.

What's funny is that Capital One is included in my proposal and yet they approved me for a secured card.

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