Cancel lesser Credit Cards

I got approved recently for a plat card(which has the limit of all my other cards combine) and now have a total of 6 CC, 4 of them with very good limits, good brands, etc with what I believe too much credit..

The other 2 are the lesser companies, Providian(no grace period) and orchard bank (heard bad things).. Is it wise to cancel the lesser 2 esp Providian which I had for 3 yrs so this way the other companies wont think i have TOO MUCH credit?.

According to FICO's brochure: http://www.myfico.com/Offers/Brochure/Credit_Scoring_booklet_2002.pdf it will NOT help you to close out old accounts. Also, it doesn't help to open up accounts just to have "more accounts" or "more available credit".

I just got my credit report today. I got a 725 score. My #1 negative reason was that i "don't have enough credit history". I believe the credit agencies LIKE it the OLDER your average account age is. So, unless you're closing an account that's been opened up a few months, i'd just keep it open. My #2 negative reason was a high AVERAGE balance on my credit cards (d@mn that 0% balance transfer! ). My #3 negative reason was using more than 50% of my limit on 1 credit card (d@mn that 0% balance transfer again!).

So, I guess that also means you shouldn't call to ask the banks to LOWER your credit limit (like i've erroneously done in the past), as you don't want to go over that magical 50% point.

Staples i would usually agree with you

but the 0 grace period makes the card useless not that he would auctually use it


another option is to call prov.. and get them to upgrade your card to something decent that way you would have another back;up card and you would keep your long account history with prov...

But, if these cards are not used, they would be called "inactive accounts", right?

SUCKISSTAPLES said:

<< 6 credit cards is not too much credit...I have over 50, and havent been rejected for "too much credit"...
>>

wow!!! why do you need so many cards? Just curious...I always pay my balance in full, and there are not many good reward cards now, so I tought there was no reason for me to get more cards, but maybe I'm wrong? For me having an extra credit card means only more mail in my mailbox

Closing credit cards is personal opinion. Unless the account is the oldest on your credit history and/or you have a relatively short credit history, there shouldn't be an adverse affect.

Many people choose to close accounts which are no longer used. It's simply preference. I can vouch for this. Would mine be higher if I had left them open? The answer is no, in my case. For what it's worth, of course.

In the event you have a large number of accounts open, it may actually boost your score nominally, dependent on your income.

The bottom line is that you should identify your own personal credit history and specific circumstances. Do not rely entirely on opinions presented here. You will get conflicting views, despite the possbility that both may be correct to their respective holders.

yes primarily for rewards, not for 0% offers (I dont flip CC balances)...

many of us are constantly solicited with CC offersn (I easily get 5-10 per week) and I pick the few which offer rewards I feel are valuable...they have been amassed over the past 10+ years, so its not like I applied for dozens at a time, maybe 5-6 per year when I received an interesting solicitation...

I have several Discover cards (5 or 6), 5 or 6 AMEX cards, several Bank One cards, etc....and with the exception of just 1 or 2 , i NEVER seek out the application, I only respond to solicitations... much less likely to get the response "we're sorry , you already have an account with us" if THEY solicited me to apply for yet another one of their cards...I wait till they want me to get an additional line, I dont seek it out...

Several people wonder "why"? Its entirely a personal preference. I like the feeling of having $1M+ available credit, even if I never choose to use it...It also has its advantages:

1) I get to pick the particular card for my particular need (if I want best rental car protection, I use the one with primary rental car coverage, If Im travelling I use the one with excess luggage insurance and common carrier insurance, if I need extra airline miles so my existing ones dont expire, I use that one, etc).
2) There are times when you may need/want to make large purchases (recently I purchased 90k in savings bonds for 3 family members within 15 minutes...this is very easy when you can put it on 5-6 rewards-earning cards, instead of charging up to your credit limit, then waiting to payoff the balance and then charging more, or the complications of prepaying 1 card, only to find out you cant charge more than the credit limit in any 1 month)


Dont get me wrong, there was a time when I believed having too many accounts was bad too (I listened to the myths everyone repeated about "too much credit" and I actually closed 10-20 accounts several years ago, only to regret it later when I discovered:

1) IT DID NOT HELP MY CREDIT SCORE
2) IT DID NOT MAKE OBTAINING NEW CREDIT EASIER
3) I could have used the old cards to increase my limits on new cards with the same bank (reallocating credit lines, etc)

I learned from my experience, and I'm hoping others can benefit from my hindsight....

Many people are "scared" of theft or loss of the cards, or that things are too complex if they have too many cards...If you keep them at 0 balance, you dont get statements, so theres no recordkeeping involved....Obviously I dont carry all these cards, and a simple list of all your cards is all thats needed in case of theft, etc. Theres no liability for fraudulent charges so theres no worries...

In the end, you will do what you desire...but just dont fall for the myth that there is something "bad" about hanging onto these 6 cards...

I think DaveHanson and some other FW members are approaching my card count...

My card count has NOTHING to do with my profession or income. 90% of these cards were given to me while in college or law school (not earning any money). They dont ask to see any income documentation, and I have NEVER put "attorney" on any application (except for the 3 business credit cards i have). My credit report still lists me as a "student" in the "employment" section of the credit report. Remember, credit apps only ask for HOUSEHOLD income...this can be interpreted VERY liberally, and can include scholarships, income of family members , friends (if they have ever been in your household, etc)...

SUCKISSTAPLES said:

<< yes primarily for rewards, not for 0% offers (I dont flip CC balances)...

many of us are constantly solicited with CC offersn (I easily get 5-10 per week) and I pick the few which offer rewards I feel are valuable...they have been amassed over the past 10+ years, so its not like I applied for dozens at a time, maybe 5-6 per year when I received an interesting solicitation...

I have several Discover cards (5 or 6), 5 or 6 AMEX cards, several Bank One cards, etc....and with the exception of just 1 or 2 , i NEVER seek out the application, I only respond to solicitations... much less likely to get the response "we're sorry , you already have an account with us" if THEY solicited me to apply for yet another one of their cards...I wait till they want me to get an additional line, I dont seek it out...
>>


<snip>

whatever you do, please don't use discover cards. reasons are here:
http://www.fatwallet.com/forums/arcmessageview.cfm?start=41&catid=24&threadid=136936

read my experience with them. They didn't handled themselves well in the cyberrebate scam and fought the victims in the court and even appealed winning judgments against them. I am still using Discover but only spend $2 (actually $1.98 or $1.99) per card per month on gas. So I get nearly $8 in free gas each month. pretty cool.

you guys all make since and the reasons are all valid but the bottom line is this provid.. card sucks and there is no point in keeping it

call em and ask for a card with a grace period at the very least

Yes, I also would like to hear about the free gas. Have never heard of getting $8 worth of gas for spending $2.

cak144 said:

<< Yes, I also would like to hear about the free gas. Have never heard of getting $8 worth of gas for spending $2. >>

actually i think he's saying that he has 4 cards that he charges <$2 of gas per month on and apparently discover doesn't bill him for balances <$2

quite a few people has beeing PMing me about getting free gas. you can spend the $2 on anything you want. I just choose to spend on it on gas.

as long as you don't spend over $2 per month per card on anything, Discover will not bill you. I don't know when they will cancel that or change the spending amount to the point that they will send you a bill. If you choose to use that $2 on gas, make sure you watch the gasoline meter carefully and stop when it hits about $1.98 or $1.99 so as not to be over the limit.

I am not even sure if the limit is $2. I was talking to my friend while filling up, and it ran up to $2.04. They haven't sent me a bill yet. Let me know what happen if you only have like $2.50 on the bill.

I hope I have made it clear for everybody.

diamente - i still don't get it. As someone mentioned before, the balance doesn't just disappear, does it?

If you charge $1.98 one month (and don't get a bill), and then you charge $1.99 the next month, won't your balance be $3.97? And wouldn't you get a bill for that? It's strange to think that Discover would just let the $1.98 or $1.99 "disappear" every month.

I'm waiting for my $.89 Get Connected phone charge to appear on my credit card, should have been charged on 4/5, but I still don't see it. Several times in the past internet purchases a little over a dollar didn't appear (Drugstore.com, YvesRocher). So I think you're right. This month, I will have another small long distance phone charge (no monthly fee), since I use LD mainly for faxes only once/twice a month, so I'll probably never get charged. BTW, the promotion also rebates $25 after three months of usage. Learned about the rebate deal from this forum.

It makes up for small negative balances disappearing.

i've accumulated dS charges of like a dollar i get these charges on my monthly statement EVERYTIME
no such thing as a FREE LUNCH

I keep "dormant" cards in a safe, and keep a list of all cc numbers handy in a folder. I keep account information and other policy documents in a check size file. I also list the telephone numbers of where to report lost/stolen cards for every card and keep that list in my purse. I count the total number of cc's I keep in the safe, carried with me/my husband, and do routine card counts now and then. If I didn't keep track or store the cards in a safe place, I'd be wary of getting so many. But I too like "dormant" cards, because so many interesting low interest offers come in the mail if you have them.

Can you clarify whether this VISA/MC number to report all stolen cards is absolutely free? It's probably just a feature of some card you have, in which case it would be nice to know which card that is.

Could you maybe also dig up the number? Thanks for your help.

Thanks Aranjit

DO NOT CLOSE YOUR CARD ACCOUNTS!!! (especially the oldest ones)

I was planning to apply for a mortgage a couple years ago and had triple my annual income in available credit (~$200k), so I closed several accounts. Within 6 months my FICO score went down by just over 100 points. I hadn't touched those cards in at least a couple years, and some were pretty old. Now I get the "oldest account isn't old enough" excuse instead of the "available credit is too high" excuse.

I've heard that reducing the credit line is OK, but since SIS says just put the card away, I'd listen to him. If you don't believe me, do a search on SUCKISSTAPLES and you will see why we all trust his advice now.

-C

geminidream said:

<<
If opening a new account reduces your "average account age" (and thereby knocking down your FICO a bit), would closing any account with an age less than the average, improve the average, thereby posisibly increasing your FICO?

To possibly answer my own question, I heard that "average account age" is counted from all your accounts, both closed and open... but I can't recall where I read that and it was only speculation... >>

I'm wondering this too. I opened up a MBNA B&N mostly for $50 voucher, and am thinking of just closing the account once I get the voucher, and consolidating the credit limit with another MBNA card.

Two advantages: higher CL (more likely to get higher CL from other issuers) + average age of account goes down, assuming that closed accounts are not considered.

*edit* from reading discussion boards at creditnet.com, not sure that this is true....will probably just leave accounts open for now and maybe combine CL + cancel down the road.