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HiLine
Posts: 3,176
Registered: ‎10-19-2012
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Re: Low credit limit is not a good reason to close credit cards


bs6054 wrote:

And as I said in my earlier post, doing small purchases on lots of cards isn't free, that spending (if really needed) could be on cards giving better rewards, and in many cases it might be "junk" spending, stuff you buy purely to make a purchase on the card, that you wouldn't otherwise spend.

 


Let's say if the cost of doing that is less than 1 dollar per year, we shall call it free? :smileywink:

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bs6054
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Re: Low credit limit is not a good reason to close credit cards

Sure, and it if $100 a year, can we agree it isn't?

 

The question is, over time, how many "junk" cards do you get.   It's really not just the early low-limit ones, generally you try to get better cards and better cards as time goes on.   I've probably had 50 or more cards.  If I kept them all, doing small quarterly spends, (and much of that spending  would be spending just for that purpose, stuff I otherwise wouldn't have bought), it adds up.

 

But in general, the cost will be small, but so are the gains, i.e. what exactly is the cash value advantage in keeping a $300 limit card open as compared to closing it, say 5/10/15 years after closing.  (I'm assuming that at that stage you have other much higher credit limit cards, because no-one is suggesting closing no-AF $300 cards if that is all you have!).  

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score_building
Posts: 3,578
Registered: ‎01-10-2008
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Re: Low credit limit is not a good reason to close credit cards

Agree. 

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enharu
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Re: Low credit limit is not a good reason to close credit cards

i think it depends on a lot of things.

 

if you have a >15k or higher CL card, there's really no need to keep a 200 CL card. you might maintain it for 2-3 more years while the 15k CL card ages, but after that, you really don't need it.

 

For those stuck with low limit cards due to income or whatever reason, those 200-300CL cards can add up to become quite a bit of their overall CL.

 

And of course, the question now is HOW MANY 200-300 CL cards are we talking about. 1-3? Not a problem, why not. 5-20? Uh.......i would honestly just take the AAoA hit.

 

it really depends on a case by case scenario for everyone. there's pros and cons listed by different posters here and both sides of the argument makes perfect sense, but not all of the reasons apply to everyone. so in a way its kinda a YMMV thing as well.

 

 

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thankfulheart
Posts: 619
Registered: ‎09-26-2011
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Re: Low credit limit is not a good reason to close credit cards


enharu wrote:

i think it depends on a lot of things.

 

if you have a >15k or higher CL card, there's really no need to keep a 200 CL card. you might maintain it for 2-3 more years while the 15k CL card ages, but after that, you really don't need it.

 

For those stuck with low limit cards due to income or whatever reason, those 200-300CL cards can add up to become quite a bit of their overall CL.

 

And of course, the question now is HOW MANY 200-300 CL cards are we talking about. 1-3? Not a problem, why not. 5-20? Uh.......i would honestly just take the AAoA hit.

 

it really depends on a case by case scenario for everyone. there's pros and cons listed by different posters here and both sides of the argument makes perfect sense, but not all of the reasons apply to everyone. so in a way its kinda a YMMV thing as well.

 

 


+1

 

My "mileage" has me keeping lower limit cards open because they don't cost me anything.  My poor Target card has been at $200 for YEARS, but I still use it for the 5% discount (and in hopes of an elusive CLI).  I have a low-limit Cap1 that has no AF, so my Netflix goes on that one every month and I have it set up on autopay. I also maintain a list of accounts that I pop into a few times a month just to make sure there's no funny business, so I don't mind a few minutes of my time in exchange for the AAoA and what could be considered negligible UT ratio.  There's also that part of me that thinks penny saved=penny earned, so $200CL=$200 more CL than I would have if I closed it. :smileywink:

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toppers555
Posts: 552
Registered: ‎09-28-2012
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Re: Low credit limit is not a good reason to close credit cards

This is one of those questions  I feel when it comes down to it will always be personal preference.  We all can agree to benfit of no AF ,and not costing us anything moneywise , but at what point does the padding because useless or even make a negative from having an unused credtline open in the eye of creditors? For example I recently had the AF removed from my orchard bank and best buy cards.  I will never really use either of these cards due to lack of rewards  but may change with capitol one merger.  My plan unless something changes is once my AAOA hits 5 years I am dropping all my padding credit cards.  By then I am sure I will have hit my goal of having no cards with a limit less then 5k. 



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LS2982
Posts: 15,436
Registered: ‎04-09-2011
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Re: Low credit limit is not a good reason to close credit cards


HiLine wrote:

LS2982 wrote:

HiLine wrote:

Agree or disagree?


Disagree.

 

I'm on that issue with a few lenders. Very stingy with CLI's.


Why would you close a credit card just because you cannot get a CLI?

 


Because I pay on time and in full on this card and all of my other creitors have no problems increasing my limits. I think its ridiculous that I get shot down everytime I request an increase.




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bs6054
Posts: 1,673
Registered: ‎11-11-2012
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Re: Low credit limit is not a good reason to close credit cards

And I just closed my Barclaycard Rewards, because they weren't able to let me PC or upgrade to World.  So, since for the reasons stated I don't see a benefit in keeping it open (and they don't benefit either since I don't use it), it's simpler just to close it.

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Open123
Posts: 4,219
Registered: ‎02-23-2011
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Re: Low credit limit is not a good reason to close credit cards


HiLine wrote:

webhopper wrote:
To HiLine:

Answer to earlier question... I get the satisfaction of telling them my shoes cost more than the limit they gave me on the card so they should promptly increase or close.

Is that because your shoes are expensive or because the limit is small? :smileywink:


Right, is because they're Jimmy Choos or are we talking the BBRZ $100 CL card?  LOL  Somehow, I have a feeling it's the former.  :smileyhappy:

 

Jokes aside, I think bs6054 (did I get the number right?) makes some good points.  From my perspective however small, it irks me having to allocate spending to a card's rewards I value less than the ones I do, such as SPG, MR and UR.  It's gotten to the point where even small spending on the 5% category cashback takes far too long and amount for me to deviate for the $50 redemption.  I need to allocate $1,000 into that category for Discover before I can redeem, which takes such a long time that I feel as if I'm losing out by misallocating the spend, as bs6054 observed.

 

It may not be purely from a dollars and sense perspective, but the value placed on hassle, opporutunity cost and an extra 1,000 SPG points is worth $30 to me.  So, big +1 on having to divert valuable spending.

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webhopper
Posts: 7,225
Registered: ‎09-16-2011
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Re: Low credit limit is not a good reason to close credit cards

[ Edited ]

Open123 wrote:

HiLine wrote:

webhopper wrote:
To HiLine:

Answer to earlier question... I get the satisfaction of telling them my shoes cost more than the limit they gave me on the card so they should promptly increase or close.

Is that because your shoes are expensive or because the limit is small? :smileywink:


Right, is because they're Jimmy Choos or are we talking the BBRZ $100 CL card?  LOL  Somehow, I have a feeling it's the former.  :smileyhappy:

 

Jokes aside, I think bs6054 (did I get the number right?) makes some good points.  From my perspective however small, it irks me having to allocate spending to a card's rewards I value less than the ones I do, such as SPG, MR and UR.  It's gotten to the point where even small spending on the 5% category cashback takes far too long and amount for me to deviate for the $50 redemption.  I need to allocate $1,000 into that category for Discover before I can redeem, which takes such a long time that I feel as if I'm losing out by misallocating the spend, as bs6054 observed.

 

It may not be purely from a dollars and sense perspective, but the value placed on hassle, opporutunity cost and an extra 1,000 SPG points is worth $30 to me.  So, big +1 on having to divert valuable spending.


The limit was $200 and there was an associated Over the Limit fee attached to this card..  No annual fee.

I paid the Over the Limit fee twice, then called to request a CLI... denied, hence the card was closed.

 

The card had done its job at that point, I had had it since early 2007, I had gotten my mortgage in 2008.  Closed the card at the end of 2008

 

Besides, the fact that my limit was $200 and my income was $60k.  I also had a company car, (no car note) 

Company insurance (no car insurance), Company cell phone (no cell phone payment), company provided gas card (I didn't pay a dime for gas)

 

The only monthly installment payment I had was the house note of $1400, and I was receiving rent from a tenant which was 900/month at that time.

 

 

Keeping that card just wasn't practical for me,   felt like I didn't need it, since I had a company provided Chase Corporate MC that I used for my business travel. I had a personal Discover card that I used for my personal spending.  So it got closed and shredded.

 

The shoes weren't Jimmy Choos in other words,  they were nice shoes that I needed for my job, since executive image was important to my employer at that point.

 

The card issuer was one that I had had a banking relationship with since the Year 2000, and had had several PIF, never late auto loans with.   I currently carry one of their cards, but it doesn't have a $200 limit this time around :smileywink:    As far as I'm concerned,   I saved money by closing this card... since the limit wasn't one that I could actually use.

 

It was also very fun closing this card :smileyvery-happy:  


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