AMEX. AU QUESTION....

[stan_the_man]

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@669 wrote:

@Guava wrote:

Forgive my ignorance, why are you seemingly so concerned with the 4 points drop that you're thinking of dropping off your wife's card?

You have no baddies, no inquiries, and 16 years of history, I think your score must be high enough to get prime interest rate, and take a few score hit due to high balance; at the very least the scores can buffer for a few months until you pay  the balance down. IMO pay off some of the balance will solve the issue.

If you're comfortable dropping a card with 22 of history then do it, at the end, it's your choice.

Again I'm just presumptuously speaking from the info in your post.

The 4 points does not really bother me...i guess i am more concened about the aaoa...will drop the card cause a loss or will the card continue to report for 10 years?

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Let's try a completely different solution to this problem.

If DW has verifiable income (Amex might be HH income, but I'm not sure) and has not requested a CLI from Amex on any TL with them in the last six month, why not have her request a CLI? I believe all CLI requests are soft with Amex, so there really isn't any potential negative consquences of requesting a CLI.

If DW gets a CLI, then the card and your utilization will automatically decrease. The only problem is that it usually takes 15-60 days to have the AU CLs report correctly -- so if you are applying for anything soon that might be an issue.

[stan_the_man]

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@Odiseous wrote:

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@Guava wrote:

Forgive my ignorance, why are you seemingly so concerned with the 4 points drop that you're thinking of dropping off your wife's card?

You have no baddies, no inquiries, and 16 years of history, I think your score must be high enough to get prime interest rate, and take a few score hit due to high balance; at the very least the scores can buffer for a few months until you pay  the balance down. IMO pay off some of the balance will solve the issue.

If you're comfortable dropping a card with 22 of history then do it, at the end, it's your choice.

Again I'm just presumptuously speaking from the info in your post.

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4 points is serious business!

Seriously though; that's assuming, you are close to a specific tier you are targeting, for whatever reason.

For example; I'm closely watching my scores again. I'm waiting to begin the mortgage loan app process, until my middle score is at 760+; to be in the top tier for APRs. This will save me an estimated $7k on a $150k loan (30 year fixed).

I don't know about anyone else.  But to me, $7k *IS* serious business.

Calculations based on the MyFico Loan Savings Calculator

http://www.myfico.com/myfico/creditcentral/loanrates.aspx

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I'm not saying that lower interest rates and saving money isn't good -- I'm all with you on that front. I just want to point out that your real savings isn't $7k.

The net present value (in nominal dollars) of an annuity that pays out $19.44 monthly ($7,000/120 months) and has a discount rate (interest rate) of 4% is $4,071.93.

Furthermore, since the present real value of future payments is going to be less today due to inflation eating away at the buying power of future saving the net present real value is even lower. For example, the $19.44/month savings in the last month of the loan will only have the buying power of $8.01 today.

To complicate the actual savings even further, if you do what is best financially -- and make extra principal  payments over the course of the loan -- your savings in will be reduced from the lower interest rate (though your overall savings will increase due to paying interest on a smaller balance).