Thinking About Closing Accounts - Credit Impact?

[ramblin_wreck08]

I have been a Citi CC holder since receiving the Citi MTVU card back in college. Today I hold a Citi Forward VS and a Citi Dividend WEM as my two oldest accounts. These accounts have seen no use for the past several months after Citi cut the Forward from the old 5x Restaurant/Bookstore rewards to the new 2x structure (it was a good run while it lasted). I'm not a fan of Citi CS, ThankYou rewards, or their rotating categories and would like to close these accounts, but am concerned about the potential credit score impact. More than the lack of use, I'm trying to reduce the overall number of financial accounts I have to manage.

How hard would this hit my credit score? I'm currently in the 775-800 range FICO. I don't plan on applying for anything in the next year - already have the big ticket items covered. I rarely let a statement cut with more than $1k, so utilization is not an issue.

Open accounts: CL - age

Amex BCP: $20k - 4.5 years

PenFed Platinum Rewards VS: $16.5k - 3.5 years

Amex HHonors: $10k - 9 months

Citi Forward VS: $7.5k - 6.5 years

Citi Dividend WEM: $7k - 4.5 years

Auto Loan - 2 years

Student Loan (cosigner for wife) - 2 years

Mortgage - 1.5 years

Student Loan (refi for myself) - 7 months

I also have an auto loan that is closed - PIF - that was 3.5 years old, as well as a few other student loan transfers and closed CC accounts in the 3-6 year range. As of September, I will be down to 2 hard inquiries.

[bourgogne]

Hi, if you are not using something then there is not much to manage.  why not just sd them and let nature takes it course?  you have lots of credit with good lenders, your scores are high and you don't have any spend coming up.  sounds like you could prettty much do what you want. 

[Anonymous]

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@bourgogne wrote:

Hi, if you are not using something then there is not much to manage.  why not just sd them and let nature takes it course?  you have lots of credit with good lenders, your scores are high and you don't have any spend coming up.  sounds like you could prettty much do what you want. 

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I tend to agree unless it is really important to you to close accounts...

[kdm31091]

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@bourgogne wrote:

Hi, if you are not using something then there is not much to manage.  why not just sd them and let nature takes it course?  you have lots of credit with good lenders, your scores are high and you don't have any spend coming up.  sounds like you could prettty much do what you want. 

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Of course, the reverse of this is also true.

Because OP does have a great score, low utilization, no major spend coming up, what's the real downside of just cutting the cord and closing the accounts? I understand the SD theory and that you can just let nature take its course, but to me, SDing a card doesn't really make me feel "free" of the account. Everyone's different though.

OP, I see no reason why you shouldn't just close the cards. The impact is going to be very minimal to nonexistent for your profile. Years down the road (ten years in fact), these accounts will drop from your report and possibly lower your average age of accounts. That said, you have several other accounts, so I don't see a major impact. Your utilization may go up slightly but utilization is such a fluid, temporary component of one's profile that I think it's not really worth worrying over.

I would suggest you could see about converting the Forward to something else, but last I heard, unless something's changed, the Forward is ineligible for any conversions. Your Dividend could potentially be converted  to a Double Cash for 2% on everything, but it sounds like you are just not happy with Citi. If that's not the case, you can close the Forward, and call and try to get the Dividend over to a Double Cash. But I personally don't think Citi is anything worth losing sleep over so if you unhappy then move on. Good luck.

[NRB525]

If you close the two Citi accounts, that leaves you with only three revolvers, two of which are AMEX. I like AMEX, but I find many places that do not accept AMEX.

While that may be fine in your requirements, there are several aspects where these two accounts help:

Age of Accounts, they keep helping to extend that

They are 14.5k of your 61k Revolvers CL. Revolvers CL goes down to $46,500 without them. Utilization goes up a bit without them.

They also tend to count as "zero balance" cards. "Percent of cards with balances" will go up without them.

My experience is that most of my Citi cards have balance transfer offers at 3% fee for a year of 0% APR. At some point a major purchase on the oher three may want to be paid over time. Using one of these Citi accounts fills that bill, keeps the daily use cards at PIF.

Have you considered asking whether one of the cards can be converted to a Double Cash?

There likely would be minimal impact to your credit score, but they aren't hurting and Citi is a good CC bank.

[smallfry]

I would most definitely not close those cards. Just use them for small purchases every quarter or so.

[Anonymous]

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@kdm31091 wrote:

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@bourgogne wrote:

Hi, if you are not using something then there is not much to manage.  why not just sd them and let nature takes it course?  you have lots of credit with good lenders, your scores are high and you don't have any spend coming up.  sounds like you could prettty much do what you want. 

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Of course, the reverse of this is also true.

Because OP does have a great score, low utilization, no major spend coming up, what's the real downside of just cutting the cord and closing the accounts? I understand the SD theory and that you can just let nature take its course, but to me, SDing a card doesn't really make me feel "free" of the account. Everyone's different though.

OP, I see no reason why you shouldn't just close the cards. The impact is going to be very minimal to nonexistent for your profile. Years down the road (ten years in fact), these accounts will drop from your report and possibly lower your average age of accounts. That said, you have several other accounts, so I don't see a major impact. Your utilization may go up slightly but utilization is such a fluid, temporary component of one's profile that I think it's not really worth worrying over.

I would suggest you could see about converting the Forward to something else, but last I heard, unless something's changed, the Forward is ineligible for any conversions. Your Dividend could potentially be converted  to a Double Cash for 2% on everything, but it sounds like you are just not happy with Citi. If that's not the case, you can close the Forward, and call and try to get the Dividend over to a Double Cash. But I personally don't think Citi is anything worth losing sleep over so if you unhappy then move on. Good luck.

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Good advice KDM. Can he combine his CLs into one card (Dividend) and then request a conversion to the DC? I know the OP hasn't said he wants to do it, so it's really just for my own curiosity.

[Anonymous]

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@NRB525 wrote:

If you close the two Citi accounts, that leaves you with only three revolvers, two of which are AMEX. I like AMEX, but I find many places that do not accept AMEX.

While that may be fine in your requirements, there are several aspects where these two accounts help:

Age of Accounts, they keep helping to extend that

They are 14.5k of your 61k Revolvers CL. Revolvers CL goes down to $46,500 without them. Utilization goes up a bit without them.

They also tend to count as "zero balance" cards. "Percent of cards with balances" will go up without them.

My experience is that most of my Citi cards have balance transfer offers at 3% fee for a year of 0% APR. At some point a major purchase on the oher three may want to be paid over time. Using one of these Citi accounts fills that bill, keeps the daily use cards at PIF.

Have you considered asking whether one of the cards can be converted to a Double Cash?

There likely would be minimal impact to your credit score, but they aren't hurting and Citi is a good CC bank.

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Good points NRB.

[kdm31091]

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@beautifulblaquepearl wrote:

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@kdm31091 wrote:

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@bourgogne wrote:

Hi, if you are not using something then there is not much to manage.  why not just sd them and let nature takes it course?  you have lots of credit with good lenders, your scores are high and you don't have any spend coming up.  sounds like you could prettty much do what you want. 

---

Of course, the reverse of this is also true.

Because OP does have a great score, low utilization, no major spend coming up, what's the real downside of just cutting the cord and closing the accounts? I understand the SD theory and that you can just let nature take its course, but to me, SDing a card doesn't really make me feel "free" of the account. Everyone's different though.

OP, I see no reason why you shouldn't just close the cards. The impact is going to be very minimal to nonexistent for your profile. Years down the road (ten years in fact), these accounts will drop from your report and possibly lower your average age of accounts. That said, you have several other accounts, so I don't see a major impact. Your utilization may go up slightly but utilization is such a fluid, temporary component of one's profile that I think it's not really worth worrying over.

I would suggest you could see about converting the Forward to something else, but last I heard, unless something's changed, the Forward is ineligible for any conversions. Your Dividend could potentially be converted  to a Double Cash for 2% on everything, but it sounds like you are just not happy with Citi. If that's not the case, you can close the Forward, and call and try to get the Dividend over to a Double Cash. But I personally don't think Citi is anything worth losing sleep over so if you unhappy then move on. Good luck.

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Good advice KDM. Can he combine his CLs into one card (Dividend) and then request a conversion to the DC? I know the OP hasn't said he wants to do it, so it's really just for my own curiosity.

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You can combine limits with Citi but it's a hard pull so only really worth it if you plan to use the card often IMO

[JustcallmeTM]

I am new but from my experiences tinkering with my credit for the last 2 years from reading on here and trying it out on my profile and seeing what works and what don't. It really depends on your credit profile and what you really want to accomplish. If you have everything you need my personal choice would be to close the card regardless of impact it might have if your not looking to Refinance your auto or home. 

I noticed you have a PenFed VS I would just try to increase the CL on that to replace what you lose on CIti. The impact of closing the oldest while probably not hit you hard. I have already did this 2x and have seen a minor drop in score roughly 3-5 points, but again thats my profile and my scores are not as high as yours.

 I am turning into a believer of less cards and maximizing the CL over the amount of total cards your have my score hasnt been happier.