Should I close card with low limits?

[atbyrd]

I have had two Capital One cards for about a year now.  Both have $500 limits, they refuse to increase my limit.  I recently open 1 card with USAA with a $2000 limit and a $2500 limit with Chase. I have read that you should not close cards when building credit. But when looking at my monitoring through my bank it says that one the things holding back my score is that my average limit is below $2000. Would this be a case where it would be better to close the cards?

[Crashem]

Limits on cards have no bearing on your FICO score.  a $300 limit card will help your fico score as much as a 30k limit card.  However, card issuers look at current limits heavily when deciding what limit to give you.  Some card issuers tend to try to match/beat your highest active card.  Others offer an average of what the CLs look like.  Others offer a high average (ie they ignore the little cards).  Lots of other ways as well.  You are probably okay keeping card open, but if there is an AF, close it when you like.

[pizzadude]

I'd recommend having at least 2 or 3 open revolving accounts.    Closing a CC won't impact your FICO score unless you are carrying balances and your utilization increases as a result of losing the CL.

Here's a helpful sticky thread on this subject:   http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

[Wolf3]

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@atbyrd wrote:

I have had two Capital One cards for about a year now.  Both have $500 limits, they refuse to increase my limit.  I recently open 1 card with USAA with a $2000 limit and a $2500 limit with Chase. I have read that you should not close cards when building credit. But when looking at my monitoring through my bank it says that one the things holding back my score is that my average limit is below $2000. Would this be a case where it would be better to close the cards?

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I don't think it will affect your score much open or closed.    I think it is slightly better to would keep the cards open, so IMO, keep them open only if they have no AF.  

[DaveSignal]

I agree with closing them.  When applying for future cards, some lenders may get the idea that you are 'ok' with having a $500 limit card.  If you apply for a new card and all of your current cards have limits that you are happy with, the new creditor will probably give you a limit similar or better than your current cards.

[bamagirl1]

It's a personal preference..I agree with the others..I don't think it hurts your FICO score unless it's a  high % UTI issue...I agree that it may not help you get the best credit limits, and I think after they have served their purpose, if they have an AF, close them.  I have recently done this to my 2-3 cards that had AF and plus you will get the card history for 10 years..

[Anonymous]

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@atbyrd wrote:

I have had two Capital One cards for about a year now.  Both have $500 limits, they refuse to increase my limit.  I recently open 1 card with USAA with a $2000 limit and a $2500 limit with Chase. I have read that you should not close cards when building credit. But when looking at my monitoring through my bank it says that one the things holding back my score is that my average limit is below $2000. Would this be a case where it would be better to close the cards?

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Call up CS for each card (transfer to supervisor each time) and tell them you want to cancel unless they give you a higher limit. If they don't want to increase, I would close.

[pizzadude]

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@Anonymous wrote:

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Call up CS for each card (transfer to supervisor each time) and tell them you want to cancel unless they give you a higher limit. If they don't want to increase, I would close.

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Since this is Cap1 you aren't likely to get them to give you a CLI.    Do either of them have an AF ?

[Mike360]

Only 2 reasons i'd close out a CC

1) dislike for the cc company that issues it

2) Fees

I have a Target RedCard with $200 that i've had for 5 years and no increases but i won't close it cause i have no issues with target and it has no fees. closing it won't help your score.

[Anonymous]

Before you close either card, consider how long you have had them.  If you close them you will lose the history.  By keeping them.  Keeping the balance paid 0.  Then ocassionally buying a tank of gas, and paying it off at the end of the month.  You will build up your credit.