09-18-2013 07:04 AM - edited 09-18-2013 07:08 AM
Alright, so i've done a fair amount of reasearch and the general consensus seems to be that it's a bad idea to cancel cards. My siutation is this...
I was in rebuilding mode, still am to a degree. I was having trouble getting approved for anything. So I opened up a cap one secured card and then later got a unsecured card from them. I've since got approval for Chase freedom, discover more, Amex as well as a car loan, which shows how long i've come! It was a lot of accounts to open in a relatively short time frame, and i'm happy to do some gardening now. My current situation is pretty good - scores around 700 with no negs on my CR's. However, now that I have some top tier cards, i'm thinking of cancelling my Cap One cards - both of them for a couple of reasons. They are as follows:
1) Annual Fee ( Both have them)
2) Low limits (I feel that hurts me more as my other cards have been way more generous. I really don't want accounts on my credit report reflecting with $300 and $750 limits, My discover on the other hand is $2250, Chase is $9000 and Amex is a charge.
I Was looking for some advice from the experts here to see in the long run if this is a good idea? A year has passed since I opened the cap one's so the hard inquiry affect should be null. I don't need a ton of cards, and certainly don't want/need ones with low limits. Will this have a negative impact on my score by closing both cards? If so would it take long to recover from the hit? What do you guys recommend for me? Thanks for any help you could give, much appreciated.
09-18-2013 08:05 AM
Closing them should be no issue. They will still be factored into your AAoA so you won't lose anything there.
You will only lose the CL that will no longer be factored into your utilization. But if you don't carry high balances it still isn't going to hurt you.
They won't be removed from your CR but stay for up to 10 years (+/-) as good accounts.
09-19-2013 02:31 PM
As guiness says, if you see any impact, it would be a tiny one from increase in utilization. But they are small-limit cards, so you may see no effect at all.
Also, re:"the hard inquiry affect". Closing accounts has no effect on inquiries (positive or negative) no matter what the age of the account.
With scores around 700, I'd say you can not only close these Cap1 cards but also apply for an additional Amex. Pick the revolver (non-charge card) that looks best to you and go for it. Or maybe the Chase Sapphire Preferred...pairs very well with the Freedom because you can redeem your Freedom points for much more valuable rewards. That is something that might actually be worth paying an annual fee to you.
09-21-2013 05:56 PM
Thank you both so much for the advice. I'll go ahead and cancel, cap one has just been awful on every level, but I do appreciate them giving me a chance. That i can give them.. Yes the sapphire preferred is definitely the next card i'm looking at. I'm waiting for pre-approval before I app. Right now i just have slate or freedom approval so i'll hang tight for a bit. You have all been wonderful. I truly don't know where i'd be without these forums. Thanks again!