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Closing a High Limit Credit Card

New Member

Closing a High Limit Credit Card

 
17 REPLIES
Valued Member

Re: Closing a High Limit Credit Card

I would say keep it for you AAOA. Dont be afraid to keep a little balance on it. Even 1 or 2% on it. Pay it off after your statement comes out to avoid big interest charges.

 

 

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New Member

Re: Closing a High Limit Credit Card

I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!

Frequent Contributor

Re: Closing a High Limit Credit Card


Cpbball3 wrote:

I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!



0% utilzation is weighing your score down. Let a 1-9% balance report on your highest limit cc and your score will jump

EQ 778 | TU 776
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Regular Contributor

Re: Closing a High Limit Credit Card

Personally, I would suggest to NOT close that card! Keep your AAoA and that card will help build your others (if you need to, that is Smiley Tongue ). Try letting acouple balances report each month; nothing major, but just to show activity. 

Ex 752 (Amex) Tu 758 (Walmart) Eq 703
Goal: 750+ on all
Current Cards: Cap1 Cash Back; Chase Freedom; Chase Amazon; Citi Thank You; Citi Forward; Discover iT; Amex Zync; GE WalMart; BoA 3-2-1
Established Contributor

Re: Closing a High Limit Credit Card


Cpbball3 wrote:

I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!


Closing this card WILL NOT affect AAoA.  It will continue to factor into scoring for 10 years after the closing reported date.  I wouldn't close it, especially with that line of credit.  Simply let  a small balance report on the next billing statement.  Your accounts aren't showing any activity being reported at zero.  I found this out  a few years back, when mine were all reporting zero.  I started rotating cards out, and let one report a very small balance each month, maybe 20$ or so, then payoff before next cycle closes.FICO likes to see some sort of usage to score accordingly.  You should rebound some of those points with a little usage.  In this economy, not many banks are extending those lines of credit anymore, without going through an extensive financial analysis.

Current Score: EQ: 828, EX: 833, TU: 820 Citi TY Premier WEMC 46.5, (Since 1983)Discover 15.6k|BOA WMC 30.5k|Barclays Juniper Rewards 15k|Barclays Amex 20k| Cap One QS WMC 15K|Chase Freedom VS 19.3k|Citi Dividend WEMC 25k|FNBO 15.5k|CSP 22.1K|Chase Marriott 31.3k|Citi TYP 20K|Citi DP 16.5k|Macys 5k|Sams MasterCard 15k|Barclay Arrival Plus WEMC 18.7k|Chase IHG WMC 26k|Citi Double Cash 10k|Chase MileagePlus Explorer 14k|Amex Everyday 16.2|BBVA Amex 22.5k|Total Rewards VS 12.5k|SGV 10K|Venture 12k|BOA Virgin Atlantic WEMC 11.2K|MB Amex 9.5k
Valued Contributor

Re: Closing a High Limit Credit Card

There is really no reason to close. You will still get approved for most things with that score. If you have any problems you can always recon. You will get generous credit limits on other cards by having that card on your report. Keep in mind, if you close it. It will still report positively for 10 years. The only problem I see with having that high of a limit, is for it to show even 1% utilization you have to charge at least $500. Which if you don't have spending that high. You will have problem charging that much every month.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Valued Contributor

Re: Closing a High Limit Credit Card

+1 what the others have said.

 

Bottom line is, unless you're looking for new credit (new loan specifically), a change in your score from 723 to 706 just isn't a big deal.  Scores fluctuate.  Follow the advice given above and you'll see the scores increase.  A $50K CL is nothing to take lightly. 

EX = 849 EQ = 850 TU = 850 as of 07/2017
Retired and Retiring Cards!
Regular Contributor

Re: Closing a High Limit Credit Card


KIPPIE12 wrote:

Cpbball3 wrote:

I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!


Closing this card WILL NOT affect AAoA.  It will continue to factor into scoring for 10 years after the closing reported date.  I wouldn't close it, especially with that line of credit.  Simply let  a small balance report on the next billing statement.  Your accounts aren't showing any activity being reported at zero.  I found this out  a few years back, when mine were all reporting zero.  I started rotating cards out, and let one report a very small balance each month, maybe 20$ or so, then payoff before next cycle closes.FICO likes to see some sort of usage to score accordingly.  You should rebound some of those points with a little usage.  In this economy, not many banks are extending those lines of credit anymore, without going through an extensive financial analysis.


By keeping AAoA I meant to keep the credit he has now (ie. not adding any more cards). Sorry, I realize I wasnt very clear as my last post was rushed. 

Ex 752 (Amex) Tu 758 (Walmart) Eq 703
Goal: 750+ on all
Current Cards: Cap1 Cash Back; Chase Freedom; Chase Amazon; Citi Thank You; Citi Forward; Discover iT; Amex Zync; GE WalMart; BoA 3-2-1
Regular Contributor

Re: Closing a High Limit Credit Card

You DO NOT close the card for nothing. Just listen to OptimasPrime  , you have to have a balance, If it is a 0, that doesn't build your credit. They want to see you can borrow and then pay it back. Keep it between 1-9%  util. And your score will grow, that is how I got mine to 750+ and got a bunch of new CC before my score dropped. Now ,leave them alone and it will raise again....

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Starting Score: 580
Current Score: 747
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