Hello there Reddit. About a year ago my parents suggested that I get a credit card to start building credit. At that time I was 23, fresh out of college with 6 months into my job so admittedly I was not thinking hardcore about adult stuff like building credit. They informed me that they opened one up for me to use but I never got around to retrieving the card from them. I didnt forget about the card but I also assumed if it wasnt being used it wouldnt really harm me.
Fast forward to now I (24) have been recently learning about the benefits of strategically using a credit card to build good credit as well as the awards associated, and I felt ready to actually begin the process of opening one up for myself. However when reviewing my credit score at a bank the banker suggested I wait to pay off the balance of my current card that was at 82% usage before applying for a new one. This was news to me because as I said I assumed that card was not being used, only to do some digging and find that it had been used regularly for the past 10 months without my knowledge by my parents.
The card is from Credit One Bank, the platinum x5 visa. It has a $95 annual fee and the credit limit is $600 – so not that great of a choice. The 82% usage was as of February’s cycle, however it has gone to 100% for March because as of today the balance is at $613.90. I confronted my parents and they admitted to using it. While their intent was noble (to start building my credit history) and during the beginning they paid the card off in full each month, recently they had only been making minimum payments on it for the past few months while charging more and more to the balance. I promptly retrieved the card, locked it for the time being, and changed some passwords while freezing my credit. Thankfully they agreed to send me the money to pay it off at the end of this week, which is good because the next statement date is approaching with it being the end of the month. So with the card being fully paid off hopefully my score should inflate back up. Also obviously because they are my parents and they agreed to pay it off I wont sue/report this as fraud.
From here, my credit score is currently at 651. The balance should be at $0 by the next due date (3/28/2026). As I stated the card also has an annual fee of $95 which will be charged to me in June. I would like to drop the card and avoid that fee if at all possible. However I know closing the card that at least has history on it will cause a dip in my credit score. Which wouldnt be favorable since I have another card that I want to apply for.
So I need help as far as how to proceed. My options are
A) Should I hold on to this CreditOne card for April and maintain <30% utilization to further improve credit, apply for a new card in May and then close out the CreditOne card in June to avoid that annual fee?
B) Apply for a new card immediately in April, build credit on that new card while not using the CreditOne card and then close CreditOne in May?
Please advise, any assistance would be appreciated!
I was ready to start building credit with my 1st card, but learned my parents already maxed out a card they had opened in my name without my knowledge, how do I proceed?
byu/PouhDough inCreditCards
Posted by PouhDough
3 Comments
I’m sorry this happened to you, it sucks.
Get rid of the card. Credit One is already shitty and then on top of that it’s got a fee. Make sure that it’s fully paid off and cancel it.
Then I’d look into a secured card. Discover, Capital One (NOT credit one) or a local bank you have an account with. Anything else to get you through the door.
After that, just try to scale your credit up
Check your credit report. Is the card actually yours, or are you just an authorized user? And do you have other cards on your profile you are unaware of?
Keep all 3 bureaus frozen at all times unless you need to apply for new credit. Depending on how much you trust your parents, you may also want to place a fraud alert on your profile with the three credit bureaus.
Once your balance is paid off, make sure you watch for residual or trailing interest. Don’t use the card for a statement cycle or two to ensure all the interest has been paid off.
You should apply for a card with a proper bank once this balance is paid off and the lowered utilization is reported. Capital one and Discover are popular choices for beginners. Once you’ve opened another card, promptly close the credit one card. There is no reason to be paying an annual fee to a predatory bank, and in any case credit history for closed cards in good standing remain on your profile for 10 years after closure.
Cards closed in good standing continue to contribute positively to your credit.
Simply pay the card off with the money your parents give you and close the card. It actually will end up helping you as they intended it to, and if they’re paying it off then it’s no skin off your back. Shitty they did that to you though.
My dad did it to me but it was $8k and I had to pay it