Closing/Opening Credit Cards

Status
Not open for further replies.
Joined
Mar 17, 2014
Messages
1,203
Location
Sunshine State
Bestow wisdom upon me my elders.

I am pretty credit savvy and at only 21 have great credit (749 FICO, 24K in total credit line). I do however have a number of cards. (Discover, Capital One, Barclay, Chase, Kohl's, Goodyear, Best Buy, JCPenney.)

I get a slew of credit card offers in the mail and as my credit has gotten better, I've been getting better offers (read: better rewards, lower APR, long terms of 0% APR). I want to get some of these better cards but I already have so many and I know that closing older accounts can adversely effect credit scores. I'd like to close Barclay and Chase due to their low credit lines and higher APR.

I just need some advice please. Not sure what to do or in what order.

Advice does not include reaming me for the amount of cards I have or whatever. I manage my money extremely well, which is reflected in my score.

I've had the Barclay and Chase for about a year. Capital One is my oldest at about 4 or 5 years.

Thanks

Throt
 
Last edited:
If you close the Barclay and Chase and go with a new card that has a credit line about the same as the old two combined, you'll be fine with your score. It might drop 10 points or so in the short term but will quickly rebound. Just don't drop your Capital One, as that is your oldest and is helpful for your credit history.

Your credit situation (number of cards and score) is very similar to mine ten or eleven years ago at your age.
 
I am only 23, but that sounds like a lot of credit cards IMO. Hopefully your credit card companies hate you and you pay them off monthly. Dave Ramsey 101. If you cant afford to pay cash, you cant afford it.

From what I have heard, the Chase card is a good one to have so I'd definitely try to keep that one.

OT: I am in the midst of looking for a different bank and considering Chase. Not a huge fan of the service fee my bank charges (for having an account as well as using my debit) and it's location is no longer convenient for me.

A bit OT again: I am new to direct deposit. Combine that with not wanting to use my debit for cash back and its a big no no. Just 2 weeks ago, apparently Marathons EFT system was down. My fuel light was on and I just figured I'd swing by after work. No biggy. I only had $4 in cash on me to get home.
 
Originally Posted By: dlundblad
I am only 23, but that sounds like a lot of credit cards IMO. Hopefully your credit card companies hate you and you pay them off monthly. Dave Ramsey 101. If you cant afford to pay cash, you cant afford it.

From what I have heard, the Chase card is a good one to have so I'd definitely try to keep that one.

OT: I am in the midst of looking for a different bank and considering Chase. Not a huge fan of the service fee my bank charges (for having an account as well as using my debit) and it's location is no longer convenient for me.

A bit OT again: I am new to direct deposit. Combine that with not wanting to use my debit for cash back and its a big no no. Just 2 weeks ago, apparently Marathons EFT system was down. My fuel light was on and I just figured I'd swing by after work. No biggy. I only had $4 in cash on me to get home.


I agree, it is quite a few cards and would like to shed a couple but I think I need to let my average age of credit increase before I knock it back down.

Barclay is the only one I'd like to shed. I love my Chase, Discover and Capital One. I've got around $75 in cash back built up between the 3.
 
I don't think I have ever closed a CC, I just stop using them and let them fade away.

Assuming they have no fees attached.
 
Why close any cards? Just toss them in a drawer and open the next one but don't create too many pulls in 1 time period.

I'd recommend limiting hard pulls and only opening cards that you think are truly worth it. That's not a criticism about your number of cards, but to be able to really get the next card you really want, you probably want to be careful about how many you open since each is going to equal a hard pull.

I probably have 20 or 30 cards and all but 5 could sit in a drawer all year, except for an occasional bonus offer that a couple of cards come up with (Amex promos and Small Business Saturday come to mind).

I'm not sure that I would chase APR unless you are carrying a balance.

Instead of Chase Freedom (assuming that is the one you are talking about) you may want to look at discover as well. The promo categories are typically the same, and you can get some extra points if you redeem discover for gift cards. In the past the Cash Back Mall at Discover has also been more agressive than Chase for me, though recently I am really using Ebates, Fatwallet, and SavingStar more. - Nevermind, looks like you have both already I misread.
 
Last edited:
I rarely carry a balance and only do so when money is tight, which as a student, is more often than not. But I do pretty good for myself.

I thought it would be bad to have cards that never get used. I mean by age 50, I could end up with 20 credit cards. That just sounds bad.
 
Last edited:
For what it's worth. I live on my CC 99.9% of what I buy and pay go's on it.

I only use one card*, the one that gives me the highest payback.
My CC bill is paid in full, on the due date, every month, by standing order by my financial institution.
I pay no fees.

*I do keep a backup card, in case of loss or emergency.
 
Originally Posted By: expat
For what it's worth. I live on my CC 99.9% of what I buy and pay go's on it.

I only use one card*, the one that gives me the highest payback.
My CC bill is paid in full, on the due date, every month, by standing order by my financial institution.
I pay no fees.

*I do keep a backup card, in case of loss or emergency.


I do all of my shopping on my CC's. I very rarely use my debit card. I want that cashback! It's like free money...if you don't pay interest!
 
I wouldn't worry about credit ratings too much, and don't carry a balance on any credit card. Also try not to take other loans where credit history is an issue.
I actually have no idea what my credit rating is, for our one car loan, and then the line of credit on our property, all they asked was what we owed, and what our incomes were. They did ask what the limits were on our credit cards as in theory we could go max them out tomorrow, so having lots of credit card space could be a bad thing when trying to get a loan?
Anyway, having no debt that isn't asset backed, and a reasonable income relative to how much money you want to borrow, makes you a good loan/mortgage candidate IMO.
 
One of the credit score factors is average age of credit cards. So one card at 5 years (60 months) and 5 at 1 year (12 months) = 120 months/6 = 20 months. They like to see 4 yr.

Opening a card and hard pulls may lower your credit for awhile.ok, its just confusing


I would not continually chase better CC offers.
 
Originally Posted By: Throt
I thought it would be bad to have cards that never get used. I mean by age 50, I could end up with 20 credit cards. That just sounds bad.

Someone can correct me if this is wrong, but usually age of credit history number of hard pulls and number of accounts are all factors. More accounts = better, the caveat being more hard pulls and lower age of credit reflect negatively.

From my experience, 10 or 15 cards will not be a dealbreaker within the next 5 years if you manage everything well and take it slow. Total credit line may grow too high at some point but IMO you are not close to that yet, considering you will graduate and have an income to support the credit line in the eyes of a CC company. Rethinking my earlier statement, I probably have more like 10 or 15 cards and am an authorized user on another 10, but I'm not much older than you (late 20s) and neither of us have an issue with our scores.
 
Last edited:
I don't have debit card or store card. I pay with CC for everything and setup auto-payoff each month from my checking account.

Advantage of CC if payoff each month:
Cash back
Stop payment if merchant didn't ship or any other problems
Double manufacture warranty up to 1 year
Interest free before payoff
 
As a student, don't buy what you can't afford to pay off. Drink at home / friends house vs bar or Starbucks. Little changes that don't truly affect your life / social life, can greatly help your finances.


Not applicable to the OP, but my g/f and I have chased the sign-up offers over the last year. 50k mile frequent flyer points and similar (70k at one hotel chain), etc
We've had free flights and hotel stays and 10's of thousands of points still.
My credit score? If it was affected (which may have been 4-10 point temporary drop), has been reported as 790-810 over the last year. I don't check it and didn't know where it was - some of the CC included it for me when I was approved.

Most of these cards have annual fees which are waived the first year. You call and cancel before year 2 and you get to keep the miles/points in your account, as it is linked to the hotel or airline and not the CC account. Oh and most have spending requirements of $3k in first 3 months or similar.

A bit of hassle, like rebates, but each offer is giving $400+ value, and makes it worthwhile (create a spreadsheet to track them).
 
Just be sure to close your CC account in a written letter, addressed to the company with proof of delivery. Don't go just by the telephone way alone (that you won't have any proove of the closings), or you could end up getting annuities debt popping up a few years later, as Credicard did to me with the biggest bank administrating it here. There you'll get headaches. They will ask you the protocol number and you won't have it.
 
Too much unsecured credit will lower your score (if you care about that) I'm down to two cards CapOne and the nasty Chase. I cant get chase to close my account! They even just sent me a chipped smart card on an acct I haven't use in 3 years.

You will want a good score to buy a home and rates are super low. Put min down and keep the $4 in an IRA. When credit is cheaper than anticipated mutual fund gains - you use the credit. You need to grow your IRA base fast and early.
 
Last edited:
Status
Not open for further replies.
Back
Top