topic Re: Closing Cards???? in Credit Cards

Closing Cards????

Anonymous — Wed, 14 Jan 2015 17:43:29 GMT

Hello Everyone,

since you are the experts and I'm barely reading Credit Scoring for Dummies, I wanted your input. So I have seen everywhere that to keep a better score you should only apply when needed. However I have the idea that the most cards I have the better payment hisrtory i can build. Per instance, at this moment I have a thin file with 2 secured cards and 2 store cards. I would love to add more store cards (APR doesn't matter since I am always planning on paying on full). In my mind I can see having these cards as the oldest ones and use them periodically so they don't close. Since they have no AF I don't see why they can't be forgotten in my sock drawer. On the other hand I see a lot of people stating they have close such and such card since they were not used and they were just dead weight. Do lenders prefer a person with a few tradelines than a person that has too many, Note that AAoA has nothing to do since I only want to open them as soon as possible so I don't open these cards down the road. Do I make sense??

Re: Closing Cards????

TRC_WA — Wed, 14 Jan 2015 17:53:35 GMT

I personally don't care if the lenders think I have too little or too many cards. I only apply for credit that is useful to me. If it isn't useful I don't apply. If it was once useful but is no longer useful, I close it.

I opened in December a Nordstrom, Amex, Discover, and Sallie Mae.

I closed a 76 and Chevron gas, Walmart and Apple card. All 4 were from 12-16 months old and all 4 would never see the light of day again because purchases that would have went on those cards will from this day forward go on Sallie Mae/Amex/Discover.

The 4 cards were 100% worthless... and are now closed.

Re: Closing Cards????

kdm31091 — Wed, 14 Jan 2015 18:08:23 GMT

There are widely differing opinions on this, with most people falling into either the - "don't ever close something that has no AF" camp or the "close it if it's useless" camp.

I'm with "close it if it's useless". It remains on your report for 10 years as a positive account, even if it's closed, so it's not a big deal for AAOA. Why keep something that has no benefit? If you are never going to use a card, and/or get no benefit out of it, it's just one more account to keep track of, monitor for fraud, etc. Too me, it's hassle and clutter for no real gain. You do not have to SD cards in leiu of closing them. People do it but it doesn't mean your score is going to tank if you close a card. If it is your ONLY card that may be different but I don't get that impression from your post.

If you no longer need something or it isn't growing with you - move on.

Re: Closing Cards????

core — Wed, 14 Jan 2015 18:50:11 GMT

I will simply say this: I wish I had thirty or so 20+ year old "useless" open tradelines on my report right about now. Presently, each new account I open for the signup bonus or other benefits does affect my AAoA. Whereas if I had kept all those old accounts, a new account would hardly make a _dent_ and I could apply for things with some degree of impunity. I wish my AAoA could afford to take on 10 new cards every year. It can't, because of the decisions I made in the past.

Now if you're not into applying for the hottest cash back cards when they come out, the 70k signup bonuses, and all that jazz, then that's great. Are you sure you're going to feel the same way in 10 years? The free money that they are handing out is substantial. Maybe you make 200k a year and $10k in bonuses a year is not worth the trouble to you. Things can always change though.

Re: Closing Cards????

kdm31091 — Wed, 14 Jan 2015 18:54:12 GMT

Yeah, but you have to be able to afford to spend enough to get the bonuses. If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus. I don't bring home $4000 a month. I would end up carrying a balance to get the bonus and paying off the balance would pretty much end up negating the bonus or minimizing it quite a bit.

Bonuses are great but worthless if you are going into debt to get them.

Re: Closing Cards????

core — Wed, 14 Jan 2015 18:58:28 GMT

@kdm31091 wrote:
If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus.

Not entirely true. But MS-like methods are frowned upon here so I'll leave it at that. It's up to each cardholder how they want to play the card game.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 18:58:57 GMT

@kdm31091 wrote:
Yeah, but you have to be able to afford to spend enough to get the bonuses. If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus. I don't bring home $4000 a month. I would end up carrying a balance to get the bonus and paying off the balance would pretty much end up negating the bonus or minimizing it quite a bit.

Bonuses are great but worthless if you are going into debt to get them.

Wow I just said exactly this in the GC

As far as this post goes I'm in the close it if you dont need it group And I'd do it again if necessary

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 19:07:39 GMT

@core wrote:
I will simply say this: I wish I had thirty or so 20+ year old "useless" open tradelines on my report right about now. Presently, each new account I open for the signup bonus or other benefits does affect my AAoA. Whereas if I had kept all those old accounts, a new account would hardly make a _dent_ and I could apply for things with some degree of impunity. I wish my AAoA could afford to take on 10 new cards every year. It can't, because of the decisions I made in the past.

Now if you're not into applying for the hottest cash back cards when they come out, the 70k signup bonuses, and all that jazz, then that's great. Are you sure you're going to feel the same way in 10 years? The free money that they are handing out is substantial. Maybe you make 200k a year and $10k in bonuses a year is not worth the trouble to you. Things can always change though.

But this analysis neglects the potential cost of those tradelines in the first place. Maybe they led to too many inqs and caused you to get denied or bad terms on cards you really wanted then. Maybe some issuers thought you had too much credit and refused to give you their card. And finally, AAoA isn't such a huge part of the score.

(And this isn't even considering the major parts of "close useless cards" camp, the need to track, the need to periodically spend etc)

And it looks like "too many accounts" might somehow be bad. My latest EX report flags one item, my 43 open and closed accounts, as negatively impacting my score.

(for some reason this is 9 more accounts than shows on TU, but OK). So it really isn't totally clear cut

Re: Closing Cards????

kdm31091 — Wed, 14 Jan 2015 19:12:48 GMT

I agree that I think there is a point of "too many accounts", so building up with useless accounts or not closing useless cards isn't a good idea. Creditors can see if you already have lets say 30 accounts, and if 10 of them are useless, do you really want to be declined for a card you DO want because you already have too much credit?

You can't get infinite credit. It's based on your income too, not just credit score. There is a peak and beyond that you will likely be declined unless you improve income. Therefore, getting rid of useless cards can allow you to get cards you actually want. Unless you make tons and tons of money this is something to consider.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 19:20:48 GMT

With all I have learned this past 5 months trying to build a credit I am completely sure I do not intend to apply for something I cannot pay in full with my monthly income or Emergency fund. I understand that the more cards you have, the more you will need to monitor for fraud or ID theft but that can be easily monitored with MPM. I may be too aggressive in trying to build a credit, I just am not looking for applying for any car loan or mortgage within the next 3 years so I want to make sure I'm taking all the steps so i don't have to worry about not enough history or an account dropping my AAOA, (which right now is pretty low).

Re: Closing Cards????

core — Wed, 14 Jan 2015 19:28:33 GMT

This idea of "too much credit" is precisely why I call in and request CLDs... another action many here find unfathomable. For me, there is no reason my limit needs to be above $5k or whatever the minimum is for that card class, since I push the bill payment the same day I make the charge. To be honest those Visa siggys and their minimums taking up my "allowed" available credit are the biggest thorn in my side but that's another matter. They have to be the first to get closed, when it comes to that. My Discover it can stay at $1200 for life and I'll still love the card. If they were all like that, I'd never even have to worry about reaching internal limits.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 19:35:24 GMT

@core wrote:
This idea of "too much credit" is precisely why I call in and request CLDs... another action many here find unfathomable. For me, there is no reason my limit needs to be above $5k or whatever the minimum is for that card class, since I push the bill payment the same day I make the charge. To be honest those Visa siggys and their minimums taking up my "allowed" available credit are the biggest thorn in my side but that's another matter. They have to be the first to get closed, when it comes to that. My Discover it can stay at $1200 for life and I'll still love the card. If they were all like that, I'd never even have to worry about reaching internal limits.

I'm with you. I'm haunted by the visa I closed 20 years ago. I wish I had just left it open and not used it. Then again, it might have got me into trouble in my 20's.

On the 2nd point I'm happy to keep my CL's low in order to avoid reaching my internal limit. I don't make a ton of money, at least yet, and I prefer having the option to have more cards with lower limits than a couple monsters maxing me out. And it's all the credit I need for the time being. In the future my position and perspective will probably change and I'll want to close cards and get some monster limits.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 20:16:37 GMT

Oh goodness, it's the trite "Should I close/should I not close my CC account that I no longer use?" debate again. It seems like this thread pops up in one form or another every week and it always sparks spirited debate. Personally, I think the pros of keeping unused no AF credit lines open outweigh the cons, but I find the debate tiresome so I'll just present the list and let you make your own decision.

Here is a summary of some of the main pros and cons of both sides:

Pros to keeping unused no AF cards open:
-Helps with long term AAOA
-Provides you a possibility to PC an unused card into a useful card later without a hard pull (like many people have been doing with their long neglected Citi TYP cards when they've been converting them to Double Cash)
-Provides possibility, depending on the creditor (most notably Chase, and to a lesser extent Barclays and a few other creditors), to consolidate or transfer lines from unused cards to new cards (for example, moving some of your Slate credit line to a Freedom).

Cons to keeping unused no AF cards:
-Potential for fraud (especially if the unused card is unmonitored)
-Might make creditors that you apply for nervous that you have too much available credit (and as a result, they might double or triple pull, give you unfavorable terms, or simply deny you outright.)

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 20:16:05 GMT

@Anonymous wrote:
Oh goodness, it's the trite "Should I close/should I not close my CC account that I no longer use?" debate again. It seems like this thread pops up in one form or another every week and it always sparks spirited debate. Personally, I think the pros of keeping unused no AF credit lines open outweigh the cons, but I find the debate tiresome so I'll just present the list and let you make your own decision.

Here is a summary of some of the main pros and cons of both sides:

Pros to keeping unused no AF cards open:
-Helps with long term AAOA
-Provides you a possibility to PC an unused card into a useful card later without a hard pull (like many people have been doing with their long neglected Citi TYP cards when they've been converting them to Double Cash)
-Provides possibility, depending on the creditor (most notablly Chase, and to a lesser extent Barclays and a few other creditors), to consolidate or transfer lines from unused cards to new cards (for example, moving some of your Slate credit line to a Freedom).

Cons to keeping unused no AF cards:
-Potential for fraud (especially if the unused card is unmonitored)
-Might make creditors that you apply for nervous that you have too much available credit (and as a result, they might double or triple pull, give you unfavorable terms, or simply deny you outright.)

The other major "con" (and my belief is that all pros and cons are very small on both sides) is the need to prevent the issuer closing, by making periodic charges to the unused cards. This can be a very slight effort but takes some overhead, and wastes spend you could put on a better card.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 21:09:49 GMT

Sorry If I made a question that would create unneccessary debate. I guess I was looking to see if there was a reason I was unaware of why a person may want to close an old card if it has no AF. I am not saying I want 70 unnecessary cards, I just want enough tradelines that show I'm a responsible person and pay all of my bills. for almost 8 years I thought I was building a credit by paying all of my bills on time until of course I understood if it's not credit it doesn't count. So I'm a little late to the party.

Re: Closing Cards????

kdm31091 — Wed, 14 Jan 2015 21:19:08 GMT

Don't be sorry. It is a common question on here, but I think a lot of questions on here are common. Calling it trite is kind of silly, most of the questions here are repeats in some shape or form.

It's the whole point of a discussion forum to discuss things. If you don't feel like discussing the topic because it has been addressed before, then don't respond. Simple as that. Don't feel bad about asking a question OP.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 21:21:31 GMT

@kdm31091 wrote:
Don't be sorry. It is a common question on here, but I think a lot of questions on here are common. Calling it trite is kind of silly, most of the questions here are repeats in some shape or form.

It's the whole point of a discussion forum to discuss things. If you don't feel like discussing the topic because it has been addressed before, then don't respond. Simple as that. Don't feel bad about asking a question OP.

Agreed No need for sorry

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 21:28:46 GMT

@kdm31091 wrote:
Yeah, but you have to be able to afford to spend enough to get the bonuses. If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus. I don't bring home $4000 a month. I would end up carrying a balance to get the bonus and paying off the balance would pretty much end up negating the bonus or minimizing it quite a bit.

Bonuses are great but worthless if you are going into debt to get them.

That's why you have 3 months to spend it.

Re: Closing Cards????

Anonymous — Wed, 14 Jan 2015 22:02:42 GMT

@kdm31091 wrote:
Don't be sorry. It is a common question on here, but I think a lot of questions on here are common. Calling it trite is kind of silly, most of the questions here are repeats in some shape or form.

It's the whole point of a discussion forum to discuss things. If you don't feel like discussing the topic because it has been addressed before, then don't respond. Simple as that. Don't feel bad about asking a question OP.

No no no OP, don't misunderstand me. The question is not trite; you did nothing wrong by asking the question.. The debate is trite; I said so in my original post. And kdm, calling the debate trite is absolutely not silly. This question gets asked every week and the same people (not going to name names) say the same things over and over again. The debate never becomes heated, it just becomes pointless since no one's mind is really going to be changed about this. That's the definition of silly.

Re: Closing Cards????

kdm31091 — Wed, 14 Jan 2015 22:04:00 GMT

I will agree in that it tends to be standard responses, but, again, I think many questions on here are recycled over and over...just ignore it if you are bored with it IMO.