To Close or Not to Close?

[Anonymous]

Good evening,

I am new to the message board, and have found the postings very educational - thanks everyone! 

My question is about credit cards and whether or not I would be okay with closing some - not necessarily to raise my FICO score...  Here's my situation:  First, I have a very high FICO score.  I generally have very little credit card debt (normally always pay balances every month), plenty of credit history, variety of credit, etc. 

I find, however, that I have way too many credit cards that I have accumulated over the years.  I opened the accounts for special discounts or zero percent financing (i.e. Dell, John Deere, Target, etc.).  After I received the discounts or took advantage of the zero percent financing and paid off the original amounts, I haven't used the accounts. 

A recent FICO report said the amount of cards I have open could be affecting my score.  Frankly, this is not concerning to me, but I would like to close out a few cards since I never use them anyway and would feel better if they were off the books... 

Will doing this lower my FICO score?  The two credit cards I will keep open have a $2500 limit and a $10K limit (I don't owe on either except minor things each month, which I then pay off)... 

I appreciate anyone's thoughts on this...  Thanks!

[CreditBob]

Keep the three with the oldest hsitory. In other words keep the three cards that you ahve had the longest. Second, the best thing id they are credit cards like visa, mastercard, amex, etc.

[haulingthescoreup]

How many do you have? Nothing wrong with culling the herd if it's out of control, although two is kinda few in these days, with CCC's going nuts all over the place.

One rule of thumb is to keep three majors (Visa, MC, AmEx, and Discover, doesn't matter which ones), one gas card, and one store card at a store where you actually shop and can get good deals. You might want to have most of them from different issuers (credit unions, Chase, Citi, American Express, Discover, etc.), so that if one company goes wacko, you don't lose half your cards.

Closed cards remain on your report for 10 years before falling off, so nothing dramatic will happen for a while, but you should pick your younger cards for the ax. Definitely don't close down your oldest. If your TU and EQ FICO scores show your average account age (screen two), you might pick cards younger than that.

Any cards with annual fees ought to go, unless there's something really special about them.

Don't think this is an issue for you, but if you have any balances, be sure that your utilization won't be affected by the cards you close. So low CL cards are obvious targets.

But really, if your cards aren't causing you trouble, I don't know that I would worry about the FICO message. Once scores get high, FICO really scrambles to find some negatives, and some are pretty absurd.

[Anonymous]

Thanks for your advice...  I probably have 15-20 credit cards.  Two are major cards (Discover & Visa), the rest are department store cards.  The reason I originally thought about closing some is because of the comment from FICO that says this may be affecting my score.  But if, as you say, they are scrambling to find some negatives, maybe I shouldn't worry about it and just leave them open... 

[haulingthescoreup]

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@Anonymous wrote:

Thanks for your advice... I probably have 15-20 credit cards. Two are major cards (Discover & Visa), the rest are department store cards. The reason I originally thought about closing some is because of the comment from FICO that says this may be affecting my score. But if, as you say, they are scrambling to find some negatives, maybe I shouldn't worry about it and just leave them open...

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If you one day apply for something, and it really does seem to be a problem, you can deal with it them. Just keep your Visa and Discover happy by using them and promptly paying them off, letting one of them report a balance to the credit bureaus every now and then, and then paying it off before the due date. FICO should continue to love you, and so will your Visa company and Discover.

One situation where you might have to close cards is when applying for a mortgage. But I think what scares mortgage lenders are lots of majors, where you can go completely wild. A bunch of relatively low CL store cards probably wouldn't worry them.