Closing new accounts

[BT90138016]

So I was wondering if I paid off all of my revolving debt, and closed out several cards that are still relatively new, how much of a negative effect would that have on my scores and how creditors may view me? I'm planning to get better cards down the road but I plan to first pay off all of the ones that I have. I'm in a rebuilding stage of credit and the ones I want to close aren't the world's greatest.

[Imperfectfuture]

My rule of thumb with not so great cards. Get a secured card from a credit union, and a cap one quick silver one. If can't get the cap one yet, just get the secured visa,

If they have a monthly fee, close them now. Start using the secured card. If they have an annual fee, but have a grace period, just bill a subscription once a month and pay in full. You can also sock drawer until next annual fee due.

You need two to three credit cards, with one reporting a small balance each month. Depending on how clean your reports and scores, you can then app for better cards. If you need to clean up reports, do so.

[BT90138016]

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@Imperfectfuture wrote:
My rule of thumb with not so great cards. Get a secured card from a credit union, and a cap one quick silver one. If can't get the cap one yet, just get the secured visa,

If they have a monthly fee, close them now. Start using the secured card. If they have an annual fee, but have a grace period, just bill a subscription once a month and pay in full. You can also sock drawer until next annual fee due.

You need two to three credit cards, with one reporting a small balance each month. Depending on how clean your reports and scores, you can then app for better cards. If you need to clean up reports, do so.

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Sounds reasonable. I'm pretty much coming from no credit cards since 2006(rookie mistakes on minumum wage) I have two late payments on an auto loan in the last two years a ton of inquiries which I believe the majority will fall off this year and some will lose wome weight this year as well. Two collections should be closed out and one should be deleted. Several other collections that are already paid should be deleted after my dispute is finished. My oldest cards are two years old and youngest is almost two months. 

[Anonymous]

Just make sure that you leave one card that you're going to use, so you don't abandon all credit. Otherwise, getting rid of the not-great cards is a good idea as you can phase them out for better cards. 

[BT90138016]

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@Anonymous wrote:

Just make sure that you leave one card that you're going to use, so you don't abandon all credit. Otherwise, getting rid of the not-great cards is a good idea as you can phase them out for better cards. 

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Going to keep the better. Thankfully right now my oldest cards are the better ones. I'm between closing the not so greats and apping for better and apping first then closing the not so greats. My new motto is "If I don't get cash back on the card or setup auto pay, It's got no place in my wallet.''

[Anonymous]

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@BT90138016 wrote:

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@Anonymous wrote:

Just make sure that you leave one card that you're going to use, so you don't abandon all credit. Otherwise, getting rid of the not-great cards is a good idea as you can phase them out for better cards. 

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Going to keep the better. Thankfully right now my oldest cards are the better ones. I'm between closing the not so greats and apping for better and apping first then closing the not so greats. My new motto is "If I don't get cash back on the card or setup auto pay, It's got no place in my wallet.''

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That's a good philosophy. As your limits start increasing, it matters less, because you're using relatively low amounts of the credit (hopefully). I.e, I spend $1000 a month on stuff (groceries, gas, etc.) per month. When my credit limit goes from $2k to $5k, my spending doesn't change, so the utilization goes from 50% to 20%. When it goes to $50k, the utilization is now 2%. If you increase your spending because you have more credit, you're going to run into trouble if it exceeds your ability to repay (not saying you're going to do this, just providing an example). Thus, it is likely your spending will be relatively stable, relative to your credit limits, and it becomes easier to jettison cards that you don't have use for anymore. 

[longtimelurker]

The time when it is bad to close new cards (and I don't think this applies to your situation) is when it gives the appearance of bonus churning ( you meet the spending limit, get the bonus, and close the card).   If you do this often enough with the same issuer, they may decide that you are unlikely to be a profitable customer, and stop issuing you new cards.

But it sounds like the cards you are thinking of closing are "bad" and so don't fit this scenario

[BT90138016]

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@longtimelurker wrote:

The time when it is bad to close new cards (and I don't think this applies to your situation) is when it gives the appearance of bonus churning ( you meet the spending limit, get the bonus, and close the card).   If you do this often enough with the same issuer, they may decide that you are unlikely to be a profitable customer, and stop issuing you new cards.

But it sounds like the cards you are thinking of closing are "bad" and so don't fit this scenario

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Yeah there really isn't any bonus or really future with these cards.