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What should I do?

March 29th, 2011 at 10:07 am

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?

8 Responses to “What should I do?”

  1. creditcardfree Says:

    If you pay your bills on time and have very good credit as it is, cancelling some cards is not going to hurt you at all in the long run. Only in the very short term. At least that is what I have read. I have cancelled cards and never had a problem with it effecting our financial picture. Are you planning on taking out a loan in the next year? If so, I'd wait on the cancelling.

    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.

  2. monkeymama Says:

    Agreed with ccfree, except I would just close the bunch at once. I am not sure it helps to spread it out since it is the closing that hurts the score (temporarily). Not sure it is good to continually ding your FICO score when you can do it in one fell swoop.

    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.

  3. ThriftoRama Says:

    I agree with above. If you aren't shopping for credit a temporary ding won't hurt you. It's also better for your FICO if YOU close the account, rather than having the bank close it for whatever reason, including inactivity.

  4. Ima saver Says:

    I personally, do not close the cards, I just don't activate the new ones they send.

  5. PatientSaver Says:

    I don't think you can make an informed decision about the cards until you check your current credit score at any one of the 3 credit-reporting bureaus (for free).

    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.

  6. Thrifty Ray Says:

    Very good advice in these replies. I know at my job (credit union) we have staff trained and waiting to help members understand and decide the best route to go...if youre a member at a CU, perhaps they can also help you make the decision. Good luck!

  7. debtfreeme Says:

    What ever you decide keep the following things in mind:

    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.

  8. Looking Forward Says:

    Agree with all the above and I would close all but the one with the longest history and the one with the largest credit line.

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