Back when I was still trying to get out of debt, I accepted a lot of new credit cards so I could continually transfer my balances to very low rates. I'm out of debt now, but I have all these credit cards I don't use. Some have cancelled on me (which is fine) but sometimes I'll get a new card with the sticker to activate.
Should I just not activate? I've heard it's bad for your credit rating to cancel cards -- but also bad if you have too many. And I have too many.
It dawned on me I have all these experts at my fingertips! What should I do?
What should I do?
March 29th, 2011 at 06:07 pm
March 29th, 2011 at 06:50 pm 1301421051
Personally, I wouldn't want a lot of open credit cards lying around simply for fraud purposes. Too much to keep track of.
I say cancel the ones you don't need. You could cancel two every three months, if you wanted to spread it out.
March 29th, 2011 at 07:22 pm 1301422967
I'd be cautious if you expect to apply for credit in the next 12 months or so. Other than that, close close close.
I personally think it is just way too much to manage and close all my cards when I am done with them. I have found it easy to maintain a high FICO with this method.
March 29th, 2011 at 07:51 pm 1301424714
March 29th, 2011 at 09:38 pm 1301431107
March 30th, 2011 at 02:28 am 1301448485
If your score is good, i would be cautious about canceling cards and upsetting the apple cart. If it could stand some improving, I would cancel the least desirable cards, but not all of them.
Think of it this way. There's a happy medium.
One reason to keep a number of cards open is that the higher cumulative spending limit on all of your cards means that the percentage of available credit you actually spend will be lower than if you had fewer cards. Creditors like to see that while you have lots of credit at your disposal, that you are disciplined with money.
So if you have too few cards and not much available credit, creditors may feel you don't have an extensive enough record of using credit and paying your bills back responsibly.
If you have too much credit or you recently opened up several new cards, that could ding your credit because it may make them wonder if you're planning on going on some sort of spending binge.
Neither scenario is ideal.
March 30th, 2011 at 02:42 am 1301449358
March 30th, 2011 at 04:19 am 1301455152
Make sure in your request to close the account that you ask for it to be noted on your credit files that it was "closed at the request of the consumer" otherwise the people who look at your report later will ding you bcause they believe the company closed it, not you.
Also, keep the card you have had the longest. One part of your FICO score (and the other scores created by the three largest credit bureaus) is based upon the long term viability of your credit so keep the oldest or longest cc you have. If you close one you have only had for a a couple of years you have less of a credit history.
Also, before you cancel I would either sign up for one of those credit serices to monitor my FICO score through a cc card for 3-6 months so you can monitor the impacts to your FICO score. It will probably cost you about $10 a month but so worht knowing how your decisions have impacted your FICO score/credit bureau scores. Get one at the Suze orman site that tracks your FICO score, not the credit bureau scores as FICO is really the one to watch. The others follow the FICO.
April 2nd, 2011 at 07:50 pm 1301770223