Regular Contributor
sunshine7157
Posts: 137
Registered: ‎11-11-2011
Re: Do I have too many credit cards?

+1


Starting Score: April 2011- EX FAKO 639, EQ FAKO 645, TU98 FICO 665
Current Score: Jan 2013- EQ FICO 746, EX FICO is the best kept secret in the world, I guess, TU FICO ???, Vantage 790
Goal Score: 760 by years' end. I didn't make the 760 club in 2013 but I'm pounding down the door in 2014.


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Lel
Posts: 5,268
Registered: ‎03-18-2008
Re: Do I have too many credit cards?

Closing young accounts will eventually lead to an increased age of accounts - but not for a very long time.

 

Open and closed accounts are both factored into AAoA.  When an account in good standing is closed, it remains on one's credit report for as much as 10 years.

 

So, if you have 4 credit cards that are 10 years old and 4 credit cards that are 1 month old, your AAoA would be 5 years.  If you close those 4 young credit cards today, your AAoA will still be 5 years.  In a year, the AAoA will be 6 years.

 

After 10 years, assuming you don't open any new credit accounts, the 4 closed credit card accounts will fall off.  The AAoA will go from 15 years to 20 years with the disappearance of those previously closed "young" accounts.  But at 10 years, they wouldn't be young any more, and the overall effect of improvement of AAoA probably wouldn't make much of a difference in FICO scores.

Established Contributor
ztnjpv
Posts: 726
Registered: ‎02-01-2012
Re: Do I have too many credit cards?

Sunshine,

 

You don;t need to wait to see if the average account will change. It WILL change. You can pull out a calculator and figure it out yourself. 


Starting Scores (Sept 2011): All lower-mid 600s. CURRENTLY: TU FICO: 801 (3/28/14), EQ FICO 808 (3/28/14), EX FICO 798 (9/4/13) (PSECU). Goal: Achieved! Now Maintain!
Established Contributor
ztnjpv
Posts: 726
Registered: ‎02-01-2012
Re: Do I have too many credit cards?

OhioCPA,

 

Yes. I see what you're saying. I am referring to accounts being DELETED. My bad.


Starting Scores (Sept 2011): All lower-mid 600s. CURRENTLY: TU FICO: 801 (3/28/14), EQ FICO 808 (3/28/14), EX FICO 798 (9/4/13) (PSECU). Goal: Achieved! Now Maintain!
Regular Contributor
sunshine7157
Posts: 137
Registered: ‎11-11-2011
Re: Do I have too many credit cards?

Lel wrote:

Closing young accounts will eventually lead to an increased age of accounts - but not for a very long time.

 

Open and closed accounts are both factored into AAoA.  When an account in good standing is closed, it remains on one's credit report for as much as 10 years.

 

So, if you have 4 credit cards that are 10 years old and 4 credit cards that are 1 month old, your AAoA would be 5 years.  If you close those 4 young credit cards today, your AAoA will still be 5 years.  In a year, the AAoA will be 6 years.

 

After 10 years, assuming you don't open any new credit accounts, the 4 closed credit card accounts will fall off.  The AAoA will go from 15 years to 20 years with the disappearance of those previously closed "young" accounts.  But at 10 years, they wouldn't be young any more, and the overall effect of improvement of AAoA probably wouldn't make much of a difference in FICO scores.



Yes, that is what I thought. I think there is a simple miscommunication or misunderstanding here... :smileyfrustrated:


Starting Score: April 2011- EX FAKO 639, EQ FAKO 645, TU98 FICO 665
Current Score: Jan 2013- EQ FICO 746, EX FICO is the best kept secret in the world, I guess, TU FICO ???, Vantage 790
Goal Score: 760 by years' end. I didn't make the 760 club in 2013 but I'm pounding down the door in 2014.


Take the FICO Fitness Challenge
__________________________________________________________

To talk before you think is to shoot before you aim. Words can hurt or they can help. What did yours do today?
Regular Contributor
sunshine7157
Posts: 137
Registered: ‎11-11-2011
Re: Do I have too many credit cards?

ztnjpv wrote:

OhioCPA,

 

Yes. I see what you're saying. I am referring to accounts being DELETED. My bad.


Oh, ha! Now I see where you're coming from.....


Starting Score: April 2011- EX FAKO 639, EQ FAKO 645, TU98 FICO 665
Current Score: Jan 2013- EQ FICO 746, EX FICO is the best kept secret in the world, I guess, TU FICO ???, Vantage 790
Goal Score: 760 by years' end. I didn't make the 760 club in 2013 but I'm pounding down the door in 2014.


Take the FICO Fitness Challenge
__________________________________________________________

To talk before you think is to shoot before you aim. Words can hurt or they can help. What did yours do today?
Moderator
Moderator
Lel
Posts: 5,268
Registered: ‎03-18-2008
Re: Do I have too many credit cards?

Just noticed the earlier comment about being removed as an AU on a young card.  In this situation, the account should disappear from one's credit report immediately, and the positive effect on AAoA should be instantaneous.

New Contributor
Obt3wKLq5t
Posts: 53
Registered: ‎04-15-2009
Re: Do I have too many credit cards?
[ Edited ]

Further on that point, you may or may not have to actually ask the credit bureau to remove that item on your credit report.  Just check the report to make sure that it is off if it have a huge effect on your report and if you are planning to do any type of application.

 

If the card is old, there is really no reason to remove it, only remove the younger one if it impedes your ability to obtain new credit.  This means that if banks' calculator is telling them that you only can have up to 100k in total and you already have 105k, then you will need to get rid of a card to apply for the new card that you want.  The Best Buy card is the best example in my case as it takes up 5k worth of credit and I'm finding out that the credit lines for my newer cards are getting smaller and smaller even with a expanding income.  My family members are getting way bigger credit lines even though they have smaller income.

 

The other reason to cancel young cards is to churn the cards for signup points/miles.  So cancel, wait 2 years, rinse and repeat.

 

 

 

 

 

American Express SPG, American Express Costo TE, Chase Freedom, Chase Marriott Premier VS, Chase United Explorer VS, Citi Forward, Citi Dividend World Elite, Citi AA Advantage VS, Discover More, Penfed Platinum Cash Rewards, Penfed Platinum Rewards, Dell, Macy, Kohls for extra savings
VantageScore - 990
CreditKarma - 772
According to Identity Guard:
Equifax 794
Experian 786
Transunion 797
Member
ds4365
Posts: 8
Registered: ‎12-20-2009
Re: Do I have too many credit cards?

I have 10 more than you do...............(25). All serve a purpose......all are rotated and get used. My utilization is .25 percent on 133,675.00 total credit line. (credit available 133,250).

Use them responsibly.......pay in full almost always....leave one card showing a balance each month. Don't be tempted as to what you can buy.....and your credit score will soar. I believe and think it has actually happened to me....that creditors will see that if you can manage that many cards, and that much credit, and do it for a very long time, that you indeed are paying attention to your credit rating and live within your means. Be happy that you don't have to worry in any emergency......and that alone is a better feeling than having all the things you could acquire.

New Contributor
LilNYC
Posts: 184
Registered: ‎07-08-2012
Re: Do I have too many credit cards?

I'm not sure if you have too many cards but some of them are superfluous. Chase Amazon is pointless since you have the Citi Forward which gives you 5% on Amazon & restaurants (vs.Chase Amazon card's 3% on Amazon & 2% on restaurants; your Penfed gives you 5% on gas which beats Chase Amazon's 2% on gas.)

Regarding Bloomy's card- very difficult to buy much with a paltry $1500 limit plus since you have Amex BCE you get 2% back at Bloomy's which beats the 1.5% Bloomy's offers on their card ( 3 loyallist pts = 1.5% bc you need 5,000 pts for a $25 gift card.)

 

Citi Thank You $13,200 - Chase Freedom $3,100 - AMEX Zync NPSL (init. ability $17.5K) - Citi Forward $7,000 - AMEX BCP $6,000 - USAA Rate Adv $15,000 - USAA World MC $12,000 - Discover More $4,000 - Amex Hilton Honors $4,500 - Amex SPG $2,000 - Barclay's Priceline Rewards $6,400 - Chase Sapphire Pref. $7,500

EQ: 794. TU: 704. EX: 755