Do I have too many open revolving accounts?

[riverbluffer]

Hello all,

I am on a journey to increase my credit scores and I just have some questions about my credit cards.

As of Feb, my utilization on all my credit cards was hovering around 60%.  I paid off all my balances in full earlier this month, so now I am just waiting for the 0 balances to report.  Hopefully this will raise my score considerably (I'm in the 580s across the board right now).

I also want to keep a healthy credit profile and be able to obtain more credit in the future, so I would like to know if I have too many credit cards?  Here is what I have right now with credit limits... I am 2 years into recovering from a BK7 so I don't have the best cards available.  All accounts have a 0 balance.

Cap1 Visa/750

Cap1 MC/750

1st Premier (x2)/700/300

Merrick Visa/1000

Matrix MC/400

Fingerhut/700

Amazon Store Card/400

Walmart Store Card/600

Target Store Card/300

1st National Visa/350

Total:  $6250 in available credit.

Is this considered too many open credit cards in terms of building credit and being able to open better cards in the future?

Is it worth it to keep the low limit cards open in order to build credit?

Will having excessive open accounts ever affect my ability to obtain future credit?

All of these accounts are 2 years old or less.. Will it ever be beneficial for me to close any of these accounts either now or in the future?

Any tips or information to help me maximize my credit health would be greatly appreciated!

Thanks!

[AeroKrix]

I would suggest keeping these cards open right now. They aren't hurting you, but the usage on those cards are the ones hurting your score. The bad thing about low limit cards just using $100 of a $300 limit already puts your utl at 30%. And since you say, you're at 60% utl, for such a low limit, it can have an adverse effect.

in the case of low limits, prime lenders view those limits as a person inability to handle any large amount of credit. The worst part about it is you have cards that have a hard time granting CLI's to even the most on-time customer. But I would recommend pay down those balances and keep all cards UTL below 10%. or apply for a US Bank Secured and deposit $1000 or more. If you have to take 6 months to save that money...do it. Good luck to you.

[09Lexie]

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@AeroKrix wrote:

I would suggest keeping these cards open right now. They aren't hurting you, but the usage on those cards are the ones hurting your score. The bad thing about low limit cards just using $100 of a $300 limit already puts your utl at 30%. And since you say, you're at 60% utl, for such a low limit, it can have an adverse effect.

in the case of low limits, prime lenders view those limits as a person inability to handle any large amount of credit. The worst part about it is you have cards that have a hard time granting CLI's to even the most on-time customer. But I would recommend pay down those balances and keep all cards UTL below 10%. or apply for a US Bank Secured and deposit $1000 or more. If you have to take 6 months to save that money...do it. Good luck to you.

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I don't think OP needs a secured card. OP is already two years into a rebuild.  Util seems to be a bigger issue and of course the ding from all those new accts have probably lowered OP's AAOA. 

If anything start shedding some of the higher APR cards that charge a monthly fee. 

[toi34]

+2

Also, ALL of your cards should not have a $0 balance; let ONE card report a balance anywhere between 1-9% of your credit limit. You will see a NICE bump in points if you do this.

[takeshi74]

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@riverbluffer wrote:

Is this considered too many open credit cards in terms of building credit and being able to open better cards in the future? 

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No but you also need to consider how many you can responsibly manage and monitor.  X cards doesn't really mean anything in and of itself.  Plenty of peope with excellent credit have a very large number of cards.  Plenty with excellent credit also have just a few.  Plenty are also somewhere in the middle.

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@riverbluffer wrote:

Is it worth it to keep the low limit cards open in order to build credit? 

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Always consider the usual factors that play into credit scoring.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Keeping them open keeps your available credit higher which can help with utilization -- though not as much with lower limit cards as with higher limit cards.  You can do the math to see how closing a card would affect your utilization.  With open cards you're building payment history so as long as you can responsibly manage them and keep the history positive then it can help.  AAoA will increase whether a card is open or not -- that is, until 10 years for closed cards.  The immediate effect from closure is utilization.  Whether they're worth keeping open or not is your call to make.  I probably wouldn't keep them open unless I had a use for them but you need to decide using your own priorities and preferences.  If you can't monitor your cards you're increasing your risk of exposure to fraud.  If you want to avoid paying AF's then you might want to close the cards with AF's.

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@riverbluffer wrote:

As of Feb, my utilization on all my credit cards was hovering around 60%.  I paid off all my balances in full earlier this month, so now I am just waiting for the 0 balances to report.  Hopefully this will raise my score considerably (I'm in the 580s across the board right now).

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Utilization is 35% so definitely keep it in check.  30% is the generally recommended max but optimal is much lower and ~10%.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx