The reasons behind closing my first credit card and what I would do differently if I could turn back time

If you’ve been involved with credit cards for a while, you’ve likely come across the advice: 'Never close your first credit card.' Since the age of your credit history impacts your score, shutting down one of your first cards can hurt your credit significantly.

So why did I choose to ignore that advice and close my first credit card? And with the benefit of hindsight, what would I have done differently? Let’s dive in.

The moment I opened my first credit card

Back in 2020, when the pandemic was at its peak, I found myself developing an interest in personal finance while quarantined at home. This curiosity quickly turned into a passion, leading me to explore the vast world of credit cards. The idea of traveling for a fraction of the cost using points and miles was something that fascinated me.

If I was going to dive into the world of points and miles, my first step was to get my hands on a credit card. I thought this would be an easy task, especially after watching countless videos and reading articles that said the Discover it Secured card was a breeze to get approved for. So, when I submitted my application, I was confident I’d be approved.

I was shocked when my application got rejected.

This rejection really threw me off and made me lose interest in credit cards for a while. I didn’t try again until a year later. I asked my parents if they’d be willing to add me as an authorized user on their card, but they turned me down. Not wanting to be left out of the credit card world any longer, I rushed to get approved for whatever card I could, which led me to the Petal 2 card.

The details for the Discover it Secured and Petal 2 credit cards have been independently collected by Dinogo. The information on this page has not been reviewed or provided by the card issuer.

The reason I decided to close my first credit card

When I got approved for the Petal 2 card, I couldn’t have been happier. It was a great entry-level card: I was given a $500 credit limit with the possibility of a credit line increase after six months of responsible usage. The card started at 1% cash back, but this gradually grew to 1.25% and then 1.5% as I continued to use it wisely.

I stayed committed to following all the credit card rules, and as a result, my credit score steadily improved. Thanks to the Petal 2, I later became eligible for cards like the American Express® Gold Card and the Chase Sapphire Preferred® Card.

So, why did I decide to close my first card?

In 2023, I received an email from Petal notifying me that my Petal 2 card was being upgraded to a Petal 1 Rise. While my Petal 2 had no annual or monthly fees, the Petal 1 Rise came with an $8 monthly fee. For a card that offered minimal benefits, paying $96 annually felt unreasonable to me.

No alternative was offered to switch to a different card without a monthly fee. I kept the card for another year, leveraging the credit history I built with it to improve my chances of getting approved for other cards. Once I had a solid mix of cards supporting my credit score, I decided it was time to part ways with Petal. The process was surprisingly straightforward; the customer service representative didn’t try to persuade me to keep it, nor were they taken aback by my decision to close the card.

The details for the Petal 1 Rise credit card have been independently gathered by Dinogo. This information has not been reviewed or endorsed by the card issuer.

What I would do differently with hindsight

With the knowledge and experience I’ve gained in the credit card world, I would definitely approach my first card differently if I had the chance. I wish I had spent more time researching Petal before jumping into opening the first card I thought I could get approved for.

I don't think anyone saw the forced product change coming, but with more research, I would have realized why it’s wiser to stick with established credit card issuers instead of newer ones. Major players like Chase and Capital One tend to follow better practices, such as letting customers switch to a no-annual-fee card if desired.

I also wish I had applied for a couple more secured cards, like the Capital One Quicksilver Secured Cash Rewards Credit Card or the Capital One Platinum Secured Credit Card, before dismissing them as options. And given that I was a college student at the time, I definitely should have explored student credit card options.

My advice for those new to credit cards

Starting out with credit cards can be overwhelming, and rejection early on can be discouraging. If you’ve been turned down for a beginner card and can’t become an authorized user on someone else’s account, it can feel like your options are running out. My top tip: Don’t lose hope.

Keep in mind that nearly everyone in the points and miles community has faced rejection at some point. If you’re turned down for a card, take a step back and reassess your situation to figure out what might be going wrong. You could be applying for cards that don’t match your qualifications, or maybe your income isn’t high enough for the issuer to feel confident lending to you.

Don’t rush the process like I did when applying for your first card. Stick to well-established issuers or your local credit union instead of falling for the allure of newer startups.

Lastly, remember that navigating the world of credit cards is a long-term journey, not a sprint. It’s better to take your time, do thorough research, and make sure you’re making the best decisions for your financial future.

Key takeaways

Sometimes, it’s okay to break away from traditional credit card advice. For me, closing my first credit card was the right move to avoid a monthly fee that wasn’t justified. If you're on the hunt for your first credit card, take note of my experience: don’t rush. Your future self will appreciate the patience.