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Do I have too many credit cards?

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sunshine7157
Regular Contributor

Re: Do I have too many credit cards?

+1

Message 31 of 44
Lel
Moderator Emeritus

Re: Do I have too many credit cards?

Closing young accounts will eventually lead to an increased age of accounts - but not for a very long time.

 

Open and closed accounts are both factored into AAoA.  When an account in good standing is closed, it remains on one's credit report for as much as 10 years.

 

So, if you have 4 credit cards that are 10 years old and 4 credit cards that are 1 month old, your AAoA would be 5 years.  If you close those 4 young credit cards today, your AAoA will still be 5 years.  In a year, the AAoA will be 6 years.

 

After 10 years, assuming you don't open any new credit accounts, the 4 closed credit card accounts will fall off.  The AAoA will go from 15 years to 20 years with the disappearance of those previously closed "young" accounts.  But at 10 years, they wouldn't be young any more, and the overall effect of improvement of AAoA probably wouldn't make much of a difference in FICO scores.

Message 32 of 44
ztnjpv
Established Contributor

Re: Do I have too many credit cards?

Sunshine,

 

You don;t need to wait to see if the average account will change. It WILL change. You can pull out a calculator and figure it out yourself. 

Start (Sept 2011): low-mid 600s. NOW: TU FICO: 801, EQ FICO 808, EX FICO 798 (PSECU). Goal: Achieved! Now Maintain!
Message 33 of 44
ztnjpv
Established Contributor

Re: Do I have too many credit cards?

OhioCPA,

 

Yes. I see what you're saying. I am referring to accounts being DELETED. My bad.

Start (Sept 2011): low-mid 600s. NOW: TU FICO: 801, EQ FICO 808, EX FICO 798 (PSECU). Goal: Achieved! Now Maintain!
Message 34 of 44
sunshine7157
Regular Contributor

Re: Do I have too many credit cards?


@Lel wrote:

Closing young accounts will eventually lead to an increased age of accounts - but not for a very long time.

 

Open and closed accounts are both factored into AAoA.  When an account in good standing is closed, it remains on one's credit report for as much as 10 years.

 

So, if you have 4 credit cards that are 10 years old and 4 credit cards that are 1 month old, your AAoA would be 5 years.  If you close those 4 young credit cards today, your AAoA will still be 5 years.  In a year, the AAoA will be 6 years.

 

After 10 years, assuming you don't open any new credit accounts, the 4 closed credit card accounts will fall off.  The AAoA will go from 15 years to 20 years with the disappearance of those previously closed "young" accounts.  But at 10 years, they wouldn't be young any more, and the overall effect of improvement of AAoA probably wouldn't make much of a difference in FICO scores.



Yes, that is what I thought. I think there is a simple miscommunication or misunderstanding here... Smiley Frustrated

Message 35 of 44
sunshine7157
Regular Contributor

Re: Do I have too many credit cards?


@ztnjpv wrote:

OhioCPA,

 

Yes. I see what you're saying. I am referring to accounts being DELETED. My bad.


Oh, ha! Now I see where you're coming from.....

Message 36 of 44
Lel
Moderator Emeritus

Re: Do I have too many credit cards?

Just noticed the earlier comment about being removed as an AU on a young card.  In this situation, the account should disappear from one's credit report immediately, and the positive effect on AAoA should be instantaneous.

Message 37 of 44
Obt3wKLq5t
New Contributor

Re: Do I have too many credit cards?

Further on that point, you may or may not have to actually ask the credit bureau to remove that item on your credit report.  Just check the report to make sure that it is off if it have a huge effect on your report and if you are planning to do any type of application.

 

If the card is old, there is really no reason to remove it, only remove the younger one if it impedes your ability to obtain new credit.  This means that if banks' calculator is telling them that you only can have up to 100k in total and you already have 105k, then you will need to get rid of a card to apply for the new card that you want.  The Best Buy card is the best example in my case as it takes up 5k worth of credit and I'm finding out that the credit lines for my newer cards are getting smaller and smaller even with a expanding income.  My family members are getting way bigger credit lines even though they have smaller income.

 

The other reason to cancel young cards is to churn the cards for signup points/miles.  So cancel, wait 2 years, rinse and repeat.

 

 

 

 

 

American Express SPG, Chase Freedom, Citi Forward, Citi Dividend World Elite, Discover More, Penfed Platinum Rewards, Kohls
Message 38 of 44
ds4365
Member

Re: Do I have too many credit cards?

I have 10 more than you do...............(25). All serve a purpose......all are rotated and get used. My utilization is .25 percent on 133,675.00 total credit line. (credit available 133,250).

Use them responsibly.......pay in full almost always....leave one card showing a balance each month. Don't be tempted as to what you can buy.....and your credit score will soar. I believe and think it has actually happened to me....that creditors will see that if you can manage that many cards, and that much credit, and do it for a very long time, that you indeed are paying attention to your credit rating and live within your means. Be happy that you don't have to worry in any emergency......and that alone is a better feeling than having all the things you could acquire.

Message 39 of 44
LilNYC
New Contributor

Re: Do I have too many credit cards?

I'm not sure if you have too many cards but some of them are superfluous. Chase Amazon is pointless since you have the Citi Forward which gives you 5% on Amazon & restaurants (vs.Chase Amazon card's 3% on Amazon & 2% on restaurants; your Penfed gives you 5% on gas which beats Chase Amazon's 2% on gas.)

Regarding Bloomy's card- very difficult to buy much with a paltry $1500 limit plus since you have Amex BCE you get 2% back at Bloomy's which beats the 1.5% Bloomy's offers on their card ( 3 loyallist pts = 1.5% bc you need 5,000 pts for a $25 gift card.)

 

Citi Thank You $13,200 - Chase Freedom $3,100 - AMEX Zync NPSL (init. ability $17.5K) - Citi Forward $7,000 - AMEX BCP $6,000 - USAA Rate Adv $15,000 - USAA World MC $12,000 - Discover More $4,000 - Amex Hilton Honors $4,500 - Amex SPG $2,000 - Barclay's Priceline Rewards $6,400 - Chase Sapphire Pref. $7,500

EQ: 794. TU: 704. EX: 755
Message 40 of 44
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