Closing Lower Limit Cards

[GFer]

Ok, I realize it's not good to close cards, but what about when you get to the point where you really don't need them? (Especially if they have annual fees?) I know some will waive these and some won't.

It's just that I've read that some people get denied larger cl's and some can't even get cards with certain issuers because of low limit cards. But when they pull your credit they see open and closed accounts, so I'm kinda confused about this.

[Anonymous]

If they have fees and you don't need them, cut them loose.

Use them for what they are- stepping stones and move on.

[Comp5569]

Ok question here..  Im pretty sure this would be stupid to close, especially right now.

I still have my first credit card from 2003, 1fbusa, which only has a $150 limit.  I've asked for CLI and was denied.  However I have a Citi card ($3600), and Cap 1($500) open at this point.  I closed an old (2003) American Eagle card in good standing ($300, don't know why I closed it).  The Citi and Cap 1 are just opened, and havent even begun reporting yet.  Should I just keep the 1fbusa open at this point, and use it once a month and pay off?  The card kinda sucks, it has a high APR (15%) and it costs money to pay online ($12) and on the phone ($9?).  Pretty much it sucks.  Anyways, should I keep it open at this point, as it is my only card with any age?  Maybe close it in a year or two once my Citi card ages a little.

[GFer]

I would definitely get some age on the others, at least. If you pay in full (couple of times per month works great (use bill pay---FREE!), you don't pay ANY interest. I haven't  paid interest on any of my cards in a long time.

I know sometimes things happen and this can't be done. I've finally gotten into the habit of not charging anything unless I can PIF. And since finding myFico, I definitely do not wait to pay until I get the statement.

[Anonymous]

You'll still have the account on your reports for another 10 years so it wouldn't really affect you until then.

Does it have a monthly fee too? If you can't sock drawer it for a few months at a time, then I would cancel it. You've moved on to better cards.

[Comp5569]

Yeah, I definitely PIF every month.  The Cap 1 card has 0% financing till next year, but I don't want it to hurt my utl by leaving a balance on it.  Also not PIF is how I originally got myself into credit card trouble while I was in college. Sometimes I just leave like $10 bucks on a card from statement to statement, just so my CR shows it as being used. 

As for the 1fbusa card, pretty much I just use my BOA checking account bill pay thing everytime I use the card.  The card has no AF or any fee for that matter, so having it really doesn't hurt me in anyway.  

[creditreformer]

a lot of people say closing ccs is bad, but the LONG TERM impact is nil as the age stays on your reports for 10 yrs. Also, I think there comes a point when you outgrow your ccs and also I think there comes a point where having low limit ccs HURTS you.  ex., if you have a report full of 3 digit cls like say first premier (250-350), orchard (300), total visa, rewards660, creditone, etc., do you really think amex (or anyone) is going to come along and say yeah, here’s 10k cl?  After all, how can you show you can ‘manage BIG cls’ when you’re stuck w/250-300 cls?  Not to mention, I’m pretty sure oh say penfed (and EVERYONE) knows first premier/other subprimes= sure sign you’ve likely had CREDIT ISSUES in the past.  While people say it doesn’t really matter what cc you have, I tend to believe that a report full of subprimes can/does ‘hold you back.’ 

I started w/first premier and fired them @ 18 mos.  ficos rose 20 pts.  I have orchard and they’ll be fired @ 2 yrs just b/c I already paid their atrocious af.  Can’t wait to shred them and their subprime conduct (like HOLDING my payments for 1-2 weeks) in early 09. BEFORE closing ccs, I think you need ‘replacements’ lined up- AND they should have 6+ mos. to age.  My ‘replacements’ were cap 1 (started @ 300, now 1.1k yay my biggest CL so far), hooters (500), target red, and my pride and joy, BA 99/500.  by the time I close orchard, BA 99/500 will unsecure and hopefully CLI to @ least 1k…though I’m hoping they BEAT cap 1’s cl. 

I didn’t feel bad closing first premier as they NEVER gave me a CLI and NEVER would’ve UNLESS possibly if I wanted to pay them $25 for what likely would’ve been a $100 CLI thanks but no.  Orchard has NEVER given me a CLI and NEVER will probably and frankly, there’s NOT a whole lot you can charge on 3 digit CLs. 

I don’t regret opening the subprimes, but like a relationship or job you’ve outgrown, sometimes ‘breaking up’, while hard to do, is the BEST thing that can happen to you. 

Message Edited by creditreformer on 10-31-2008 09:47 PM