After ascertaining there was interest, in this thread I will try to chronicle the cancellation of a number of credit cards, and ask for any thoughts, opinions and experiences around such before, during, after. Backstory is:
I have over 30 CCs (mostly personal, some biz) including the wife's handful, very many obtained over a couple of AORs in the previous few years (biggest cache detailed in AOR thread from Aug '07. ...several of those listed are no longer with me). With chances of existing cards tossing worthwhile offers my way surely being nil, I'd just as well not have the "maintenance" of all these cards, or make my wife faint when she opens up the "master info doc" if I pass. Losing the ability to consolidate/reallocate and the general landscape makes scaling back the obvious choice for me. There's 5 we use in the ol' optimal reward rotation, and then when I put the rest into piles I get 6 to keep with various reasoning and 13 to cancel.
CreditKarma score at 751, I got a new mortgage (sold to US Bank) in April and have no need for my credit score...would like to keep all the accounts I decide I want to keep is about it. Should I stagger the cancellations over time/by issuer, request CLIs on cards I'm keeping before/after/by issuer? Or the hell with it and just do whatever? If asked why I'm cancelling, I plan to just tell the truth, I have too many cards that I don't use and don't want to maintain, and the way the industry's looking to be going I felt it better to remove myself from the game...fees...etc. If asked what could make me stay I have only "2% back on everything or 5% on EDP, or 0% no-fee BT offers", but really, I'm not expecting to be asked...to be given retention offers, and I don't particularly care.
The sum CL I cancel for personal as of now I think should approach but not pass 20% of total if I can do math right now.
Cards in the reward optimization rotation Juniper Emigrant Direct - $5000, 08/07 Citi Driver's Edge - $17200, 08/07 Discover Platinum/Get More - $1500, ?/01 Citi Forward - $7000, 08/09 Chase Cash Rewards - $6000, 09/06
Cards I've rationalized to keep at least for now BOA Platinum Visa - $11500, 08/07 Chase Platinum/Slate - $1000, 11/05 well crap, Chase says this was closed 01/08 Chase GM Business MC- $24000, 08/07 Citi Diamond AMEX - $4500, 09/06 Discover Business - $12200, 08/07 National City Personal - $12500, 08/07 US Bank Baylor Alum* - $7000, 08/07
Cards on the chopping block AMEX Blue* - $2000, 8/07 Cancelled 10/30/09 AMEX Blue #2 (formerly In: Chicago) - $500, 8/07 Cancelled 10/30/09 Bank Atlantic Business MC - $14500, 08/07 Cancelled 10/30/09 BOA Worldpoints Platinum MC - $1000, 08/07 Cancelled 10/30/09 Chase Sony Visa - $1000, 08/07 Cancelled 11/02/09 Chase Flex Rewards Visa* (was WaMu ESPN) - $5700, 08/07 Chase cancelled it 10/25 due to inactivity, letter arrived 10/31 CitiBusiness MC - $18000, 08/07 Citi CashReturns MC - $4800, 09/08 Tried to cancel 11/2, retentions offered 2% back for 3 months and $1000 CLI, took it Discover Gas Platinum* - $3000 09/06 (just need to hit $20 CB and cashout next month) M&T Bank Business - $12000, 08/07 Cancelled 10/30/09 National City Business - $5000, 08/07 Cancelled 10/30/09 RBS Kroger 123 - $3000, 08/07 Cancelled 10/30/09
Citi Phillips MC - $500, ?/03 When I called Citi 11/2 they showed this acct closed, but 2 reps couldn't tell me exactly when Best Buy store card - $?, ?/03ish ...really, I'm not sure if these two are even still open, I was told the BB card needed a letter mailed in to close and I said screw that, and the Citi card looks good online-access wise so maybe Citi hasn't killed it despite my thinking I could cut up the card and put it out of mind. Perhaps I'll call on it at some point.
* = On the fence about, for no specific reasons, just getting into questions of how many cards by all issuers to keep if any, how many to cancel in total, if there could ever be any benefit in keeping it..
Message edited by: MaddHatter on 2009-11-04 13:07:30 CST
I'm kinda new at this, but I would at least try to get the CL transferred over (consolidated) to the cards you want to keep, so your utilization doesn't go up.
At least keep the high limit cards open, you will likely never be able to get that kind of credit so easily ever again...and even if there is no use for it in the next couple years, its better to have than not have
I think I would also keep the M&T Bank Business, National City Business, and RBS Kroger 123 cards just for "issuer diversification." I just think it's a good idea to keep open lines with as many creditors as possible, as it may be difficult to get new ones, and if an issuer (or more) of one of your preferred cards gets into more trouble and starts hacking away somewhat thoughtlessly (like AMEX did early this year) for their own balance sheet reasons, you have others to turn to immediately.
Thinking on Sis' comment for a second, and realizing I have $14 in rewards on the Discover Biz card I could maybe get to $20 sometime, I moved that card & the Chase GM Biz to the keep list. I can't imagine a dire enough scenario where I'd pay the interest to use them, but I suppose nothing wrong with having the option there.
Moved other AMEX to the kill list too, they never gave me a decent enough CL to BT, no rewards worth purchasing with, screw em.
Message edited by: MaddHatter on 2009-10-28 22:49:12 CDT
cclyde said:I think I would also keep the M&T Bank Business, National City Business, and RBS Kroger 123 cards just for "issuer diversification." I just think it's a good idea to keep open lines with as many creditors as possible, as it may be difficult to get new ones, and if an issuer (or more) of one of your preferred cards gets into more trouble and starts hacking away somewhat thoughtlessly (like AMEX did early this year) for their own balance sheet reasons, you have others to turn to immediately.
I hear this... I'm just not sure of the need (though it did factor into the larger BOA card, National City personal, & US bank cards making the cut). I keep large cash reserves, and with 80k in credit across a handful of issuers in the "after" scenario I just don't see it as likely to come up.
If it were me I would get rid of these if you don't need them AMEX Blue* - $2000, 8/07 AMEX Blue #2 (formerly In: Chicago) - $500, 8/07 Bank Atlantic Business MC - $14500, 08/07 BOA Worldpoints Platinum MC - $1000, 08/07 Chase Sony Visa - $1000, 08/07 Chase Flex Rewards Visa* (formerly WaMu ESPN Visa) - $5700, 08/07 M&T Bank Business - $12000, 08/07 National City Business - $5000, 08/07 RBS Kroger 123 - $3000, 08/07
Might keep CitiBusiness MC - $18000, 08/07 Citi buis requires proof buis income now so you may not be able to get back Citi CashReturns MC - $4800, 09/08 see if limit can be xfered to another card Discover Gas Platinum* - $3000 09/06 (just need to hit $20 CB and cashout next month) convert to more and use for rolling 5% (higher limit and you can do 2x bonus category with 2 cards)
I'm in a similar situation, but don't see much benefit in closing cards. It's not much effort to make one purchase every 4 months or so per card...cheap rainy day insurance. I can understand the sentiment of wanting to simplify things down, but going from 30 cards to 20 doesn't really accomplish that goal. I think that a lot of the credit score loss/utilization increase fear mongering is a bit of woo woo...if you pay your bills on time and aren't overextended in your overall debt levels, your credit score is going to be high...does it really make a difference if you have a 760 vs. 800? Of course, I talk big, but I'm sticking with my pile o' cards.
CC issuers do not differentiate between YOU cancelling cards and creditors cancelling cards. If they see a slew of cards being cancelled all of a sudden, they may assume that your creditors found good reason not to want your business, and that may be good enough reason for them not to want your business either.
You may close some, and later end up with none.
Use the ones you want to keep, and let the one's you don't want remain dormant.
I am curious about the subject of continuing AOR ramafications for closing vs. keeping cards open. The days of having credit 2-3x HHI have passed unless you have bankroll to prove worthiness. My question (thanks OP for bringing up the topic), is it better to keep many lines and high limits open when applying for new cards or to cancel many of them outright before applying for new AOR cards? Many issuers now do not reallocate or even consolidate old cards into new BT cards. Is it better to cancel cards and moderate limits to attempt better results of new higher limit BT cards or to negotiate over the phone in attepmts to reallocate? From 5/09 during my last AOR I started having trouble doing this with issuers and reports have only gotten worse. Despite trouble with reallocation the number of BT cards has thinned quite a bit. I appreciate any thoughts as I am about to launch AOR 3.0. I am trying to get a better feel for how to approach issuer's market restructurization...
Message edited by: Corndogg on 2009-10-29 03:16:55 CDT
As to the Cancel-O-Rama question, if you are not doing an AOR or applying for new credit or loans there really should not be much of a concern. Your cards still stay on your credit report even when closed until they drop off after 5 years. Open or closed they are still reporting length of account, just not frequency of use, which is of little effect to your overall credit score.
CC issuers will be doing the canceling for you, as they continue to trim their balance sheets....so people looking to "simplify" by reducing the # of cards need only do NOTHING (which is always the simplest thing to do),,,the cc issuers will take care of the simplification for you.
Citi Phillips MC - $500, ?/03 Best Buy store card - $?, ?/03ish
If these two are still open, I'd keep them because of their age.
Would also keep Citi, M&t And BA biz cards (or one or two of them, probably Citi) because they're big lines. In a nuclear emergency, you could run those up first without raising flags on your personal credit report, then start loading up the personal. But maybe you don't care, since such a holocaust is a scant possibility.
I dont think necessarily that its a great idea, but it may turn out to be when you get bonus offers to keep certain cards open. Could easily make a few hundred dollars worth of reward points/credits from this, and thats why I cant wait to see the results.
Good comments from all. I might consider moving Citibusiness to "keep" as I didn't realize the new req of business income documentation...though again, how much do I truly think I could need, and quickly getting into the point of "well, 20 open cards ain't all that simple".
And PoorPence's comment: "You may close some, and later end up with none." Exactly what I'm worried about (the only thing).... and that worry mostly pertains to my reward cards, others wouldn't be the end of the world. And since I'm using the reward cards regularly, paying in full each month (or perhaps that's a bad thing now, durr), and never approach CL's, I guess I'm thinking "surely the bastages wouldn't....would they?".
Also, I will in fact aim to bring up consolidation of limit to another card, just recent developments have me expecting no-go's on this all around.
Currently thinking first calls might be made tomorrow or Monday, not sure, also not sure how many this may be.
I've already cancelled several of my AOR cards over the last year, opened one new one - the Schwab rewards card which I intend to use for almost everything. I will continue to slowly get rid of more useless plastic. I will only keep a couple of my oldest cards. There is absolutely no reason to have inordinate amounts of credit available. Closing cards will only temporarily ding the credit score by a few points, and the credit score is not all that important anymore anyway. When there is a credit crunch, credit is tight, good score or not. When the cycle reverses, everyone will be able to get easy credit again, good score or not.
Keeping dozens of active cards just for a few credit score points does not make much sense to me. Not worth the hassle.
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