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cashistrash said:Anyone closing up some credit cards since the 0% BT offers are gone? I don't see much point in keeping too many open now. If you have been following FWF, the general rule is not to close a CC unless there is an annual fee or a prospective lender asks you to do so to grant you a loan etc.
I'll keep them open in case things change in the next 2 years and they become alive again and I hopefully will still have large lines of credit to use them on again.
But mostly because I see no good reason to close them, but many good reasons not to.
I closed a few that had lines less than 2500... my reasoning was that it would make the average age of my open accounts a bit older... but I'm not sure how much that really plays into credit score. I had about 4 open cards with a history over 12 years old, and about 20 with a history less than 3 years old. By closing about 5 accounts, I increased my average age about 2 years.
I'm about to close one (Chase) as a followup on my promise to stop doing business with them after the promo rate reset fiasco of early 2009. A promise is a promise.
Quick math: 4.99% on a $5,000 balance will net you more income than 8.99% on a $0 balance.
For some reason, not a single rep or manager could understand this concept, so I'm choosing the latter option.
VerbalK said:I closed a few that had lines less than 2500... my reasoning was that it would make the average age of my open accounts a bit older... but I'm not sure how much that really plays into credit score. I had about 4 open cards with a history over 12 years old, and about 20 with a history less than 3 years old. By closing about 5 accounts, I increased my average age about 2 years. I wish that was possible. Closed accounts count towards your average age just as much as open ones do. (unless you manage to get the cards removed from your credit reports)
Message edited by: retmil on 2009-10-20 15:45:14 CDT
Cheapoking said:I believe the total average is taken from the open accounts; without the closed ones being a part of the equation? No, not for fico. People who use some other third party credit reporting sites like creditkarma believe that is true since that is how they determine the average age on their score reports. By just counting open lines. Fico counts all open and closed tradelines as well as collection accounts, installment loans, etc.
Shortly after payoff, I plan on closing the Chase cards before Chase does it. I already killed the Washington Mutual card after Chase took over and killed the benefit of owning it. IMO Chase's rewards programs are a joke based on my spending patterns.
I have a First National Bank of Omaha card that I already transferred much of the limit on to get a better card from them. When the B4L card is paid off in 3 years, I will chop it. I may get the banker to add the minimal limit to the better card.
So far, each card I chopped in the last year was replaced with a much more beneficial card. In some cases, the newer card had better rewards and/or CL.
More worrisome to me at this point is many CC companies' blanket policy of not shifting or reallocating credit lines. I believe the 0% may come back, and they may even come back with low capped fees or no BT fees at all. But truly maximizing the BT offers required the ability to create huge lines. As far as I know, only BOA still allows this to happen.
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