topic Re: Closing credit cards in Credit Cards

Closing credit cards

SouthJamaica — Fri, 23 Dec 2016 21:54:44 GMT

Well I feel like I've completed phase one of my credit building journey, which was to be able to have a sufficient credit score to get decent credit terms.

Along the way, I must confess, I have been chasing credit limits for no real reason other than to have good credit limits.

At this point I've come to the self-realization that the cards I value most are those which have some versatility, and are not strictly good for making purchases. I.e., I want cards which have reasonable options for balance transfers, carrying balances if the need should ever arise, and even for cash advances.

And so although it cuts against the grain for me, I have decided to start axing some of the less-versatile cards I have, to fine tune what I have, and concentrate on quality rather than quantity.

In looking over my credit card array, the Synchrony cards looked like the most likely suspects for thinning out, since they have no utility other than for making purchases. I will hate to see the Marvel card go, because it had the power to make cashiers smile, but having Spiderman on the card is not a sufficient reason to keep it.

My utilization will still be low in the near future, so this will be an opportunity to test whether it is really true that merely closing cards does not in itself create negative FICO consequences. Something in me says it might not be that simple, that banks are a vindictive bunch.

But we shall see.

Re: Closing credit cards

Anonymous — Fri, 23 Dec 2016 21:02:02 GMT

I loved this:

"... having Spiderman on [a] card is not a sufficient reason to keep it."

Re: Closing credit cards

Anonymous — Fri, 23 Dec 2016 21:04:56 GMT

My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.

Re: Closing credit cards

SouthJamaica — Fri, 23 Dec 2016 21:20:18 GMT

@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.

No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Re: Closing credit cards

909 — Sat, 24 Dec 2016 14:59:30 GMT

I have a dumb Barclaycard Apple rewards card. It has a $2K CL and they won't raise it w/out a HP. It earned 3x rewards for an iPad purchase but it won't fully cover a MacBook purchase. It's the last card I have with a CL below $9K and I haven't appreciated the service I've received. The only reason I keep it is to help my AAoA down the road and concern that cancelling it would harm my scores.

Question: I have six other revolvers, 5 opened in 2016 and one opened in 2012. I also have a mortgage and car loan. Oldest account is 28 years (closed) and AAoA is about 5 years. Should I be concerned about closing the Barclay card from an AAoA or score perspective?

Thanks.

Re: Closing credit cards

AverageJoesCredit — Sat, 24 Dec 2016 17:45:52 GMT

Bravo SJ!. I have come along way on my journey to rebuild from my BK7 10 years ago. In reality im starting to consider this as my credit rebirth. Before when i was younger, pre bk7, i knew to pay your bills on time and that helps establish good credit . Thats about it . Since finding this forum, my understanding of credit has become like the big bang. Even though i have hit a pesky speed bump on this road we must all travel ( chargeoff reared its ugly head), ive been coming to a head on a decision i must make.

I understand the chase for higher limits, bless Synchrony for that but also double edged sword, but there has to come a time where when is enough enough. I have been able to obtain store xards and some bank cards so a nice mix lies within. But i believe when i finish trying to rid this here average profile,lol, of that pesky baddie, in seriously considering trimming the fat from the herd so to speak. My income and spend are not that great but if i can streamline my lineup to just a chosen few , managing my profile will be much easier and probably healthier.

I now have my Discover, got a nice mc in the Dc, nice visa in Penfed( one day i will raise this limit haha), and my BBR from Boa seems a great bt card. If i can one day achieve my Amex again, perhaps i can truely find that Zen place of credit Utopia

Anyhow sorry for the long post, just felt i had an admiration for SJ's journey and mine seems to be hitting a crossroads. Happy holidays friends, AVJ

Re: Closing credit cards

kdm31091 — Sat, 24 Dec 2016 17:52:00 GMT

@SouthJamaica wrote:

My utilization will still be low in the near future, so this will be an opportunity to test whether it is really true that merely closing cards does not in itself create negative FICO consequences. Something in me says it might not be that simple, that banks are a vindictive bunch.

It is pretty much that simple, though. The only thing immediately impacted by closing a card is utilization. If the decrease in limits does not dramatically change your utilization, closing the card isn't going to do anything positive or negative to your score.

Re: Closing credit cards

driftless — Sat, 24 Dec 2016 18:25:51 GMT

Congratulations on getting to this point in your rebuild! I found it to be therapeutic to close out cards.

Re: Closing credit cards

Anonymous — Sat, 24 Dec 2016 21:18:17 GMT

@909 wrote:
I have a dumb Barclaycard Apple rewards card. It has a $2K CL and they won't raise it w/out a HP. It earned 3x rewards for an iPad purchase but it won't fully cover a MacBook purchase. It's the last card I have with a CL below $9K and I haven't appreciated the service I've received. The only reason I keep it is to help my AAoA down the road and concern that cancelling it would harm my scores.

Question: I have six other revolvers, 5 opened in 2016 and one opened in 2012. I also have a mortgage and car loan. Oldest account is 28 years (closed) and AAoA is about 5 years. Should I be concerned about closing the Barclay card from an AAoA or score perspective?

Thanks.

Nope, closing it will not alter your AAoA at all. Is it clear to you why it won't alter your AAoA? Real important for you to understand that.

The only concern I have is how old this particular Barclay card is. You don't tell us that. We need to know how old this card is, and whether it is your oldest open account. If your oldest open account is another account -- what account is that and how old is it?

With these questions I am trying to get clear what will happen to your "Age of Oldest Account" when your ultra old but closed account falls off.

Re: Closing credit cards

Ysettle4 — Sat, 24 Dec 2016 21:52:52 GMT

@SouthJamaica wrote:
@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.
No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Why this card? I found this card to be valuable as it pays you back in addition to having an eBates account - unless you simply do not shop via eBates.

Re: Closing credit cards

SouthJamaica — Sun, 25 Dec 2016 04:03:15 GMT

@Ysettle4 wrote:
@SouthJamaica wrote:
@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.
No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Why this card? I found this card to be valuable as it pays you back in addition to having an eBates account - unless you simply do not shop via eBates.

1. Useless for any purpose other than online purchases. No balance transfers. Prohibitive for cash advances. Interest rate prohibitive for carrying a balance.

2. Interest rates through the roof.

3. The way it came down and greeted me when I was on an eBates related site bugged me and interfered with me getting the transaction done.

4. My personality is such that I don't like being told where to spend my money.

5. I'm not much of a 'spender' anyway; I just kind of pay bills.

6. It's a standalone website; I prefer sites that have multiple accounts on one page, like Amex, Capital One, Barclays, Citi, Chase, etc. It bugged me that I had 3 Synchrony cards for which I had to visit 3 different sites.

7. I fully recognize that it's a super card for cash back online purchases, but (a) I have lots of good cards for making purchases and (b) I'm not much of a purchaser. It's just not something I do a lot of.

Re: Closing credit cards

UncleB — Sun, 25 Dec 2016 06:11:48 GMT

@SouthJamaica wrote:
@Ysettle4 wrote:
@SouthJamaica wrote:
@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.
No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Why this card? I found this card to be valuable as it pays you back in addition to having an eBates account - unless you simply do not shop via eBates.
1. Useless for any purpose other than online purchases. No balance transfers. Prohibitive for cash advances. Interest rate prohibitive for carrying a balance.

2. Interest rates through the roof.

3. The way it came down and greeted me when I was on an eBates related site bugged me and interfered with me getting the transaction done.

4. My personality is such that I don't like being told where to spend my money.

5. I'm not much of a 'spender' anyway; I just kind of pay bills.

6. It's a standalone website; I prefer sites that have multiple accounts on one page, like Amex, Capital One, Barclays, Citi, Chase, etc. It bugged me that I had 3 Synchrony cards for which I had to visit 3 different sites.

7. I fully recognize that it's a super card for cash back online purchases, but (a) I have lots of good cards for making purchases and (b) I'm not much of a purchaser. It's just not something I do a lot of.

Congrats on thinning out the herd!

+1 on Ebates... it seems like I get a message from them every two or three days about how I'm pre-qual'ed for a Visa Signature. I honestly looked around to see if/how it might be valuable to me, but I just don't think it's a good fit for my purchase patterns.

My only online purchases are eBay, Amazon, and very occasionally Macy's (due to Ebates). I already get 5%-6% back at Amazon and eBay using GCs from Kroger (which also gives me fuel points), so that leaves Macy's where I only shop a few times a year.

I'm sure there are some people who are avid online shoppers for whom Ebates is a great match, but I'm just not that person (unless there's something about the Ebates card I'm missing, of course).

As for Synchrony, I've decided that Care Credit might also be on my own chopping block. It did come in handy when I got a crown and dental implant last year, but after finding out how the provider has to pay the interest during the promo I'm kind of turned off. In my case I only use it at my dentist, and I actually like the guy (he's been great to me and my family) so if I can get a similar arrangement with another credit product I will. I also now have more cards (and available credit) than I did when I got Care Credit, so it's not needed as urgently for unexpected dental work. Another 'plus' to cutting Care Credit loose would be less Synchrony exposure, but that alone isn't driving my decision.

Here's to a slimmed down and well-oiled credit machine in the coming year!

Re: Closing credit cards

909 — Sun, 25 Dec 2016 12:43:42 GMT

Re: Closing credit cards

SouthJamaica — Sun, 25 Dec 2016 15:41:02 GMT

@UncleB wrote:
@SouthJamaica wrote:
@Ysettle4 wrote:
@SouthJamaica wrote:
@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.
No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Why this card? I found this card to be valuable as it pays you back in addition to having an eBates account - unless you simply do not shop via eBates.
1. Useless for any purpose other than online purchases. No balance transfers. Prohibitive for cash advances. Interest rate prohibitive for carrying a balance.

2. Interest rates through the roof.

3. The way it came down and greeted me when I was on an eBates related site bugged me and interfered with me getting the transaction done.

4. My personality is such that I don't like being told where to spend my money.

5. I'm not much of a 'spender' anyway; I just kind of pay bills.

6. It's a standalone website; I prefer sites that have multiple accounts on one page, like Amex, Capital One, Barclays, Citi, Chase, etc. It bugged me that I had 3 Synchrony cards for which I had to visit 3 different sites.

7. I fully recognize that it's a super card for cash back online purchases, but (a) I have lots of good cards for making purchases and (b) I'm not much of a purchaser. It's just not something I do a lot of.
Congrats on thinning out the herd!

+1 on Ebates... it seems like I get a message from them every two or three days about how I'm pre-qual'ed for a Visa Signature. I honestly looked around to see if/how it might be valuable to me, but I just don't think it's a good fit for my purchase patterns.

My only online purchases are eBay, Amazon, and very occasionally Macy's (due to Ebates). I already get 5%-6% back at Amazon and eBay using GCs from Kroger (which also gives me fuel points), so that leaves Macy's where I only shop a few times a year.

I'm sure there are some people who are avid online shoppers for whom Ebates is a great match, but I'm just not that person (unless there's something about the Ebates card I'm missing, of course).

As for Synchrony, I've decided that Care Credit might also be on my own chopping block. It did come in handy when I got a crown and dental implant last year, but after finding out how the provider has to pay the interest during the promo I'm kind of turned off.

Yeah that was really the cold shower for me. Once I learned that, the joy of using the card every couple of months disappeared.

In my case I only use it at my dentist, and I actually like the guy (he's been great to me and my family) so if I can get a similar arrangement with another credit product I will. I also now have more cards (and available credit) than I did when I got Care Credit, so it's not needed as urgently for unexpected dental work. Another 'plus' to cutting Care Credit loose would be less Synchrony exposure, but that alone isn't driving my decision.

Here's to a slimmed down and well-oiled credit machine in the coming year!

Re: Closing credit cards

Ysettle4 — Sun, 25 Dec 2016 18:52:53 GMT

@SouthJamaica wrote:
@Ysettle4 wrote:
@SouthJamaica wrote:
@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.
No the only pure store card I had was a Comenity Eddie Bauer card, which I got on impulse under pressure from a cashier, and cancelled a week later.

I had the Care Credit card, which was a bit like a store card in that it was only good at certain places. That's one of the cards I put on the chopping block today.

Today along with Care Credit, I also closed my other 2 Synchrony offerings, the Marvel Mastercard and the Ebates Visa card.... $47k in credit limits, out the window.

Why this card? I found this card to be valuable as it pays you back in addition to having an eBates account - unless you simply do not shop via eBates.
1. Useless for any purpose other than online purchases. No balance transfers. Prohibitive for cash advances. Interest rate prohibitive for carrying a balance.

2. Interest rates through the roof.

3. The way it came down and greeted me when I was on an eBates related site bugged me and interfered with me getting the transaction done.

4. My personality is such that I don't like being told where to spend my money.

5. I'm not much of a 'spender' anyway; I just kind of pay bills.

6. It's a standalone website; I prefer sites that have multiple accounts on one page, like Amex, Capital One, Barclays, Citi, Chase, etc. It bugged me that I had 3 Synchrony cards for which I had to visit 3 different sites.

7. I fully recognize that it's a super card for cash back online purchases, but (a) I have lots of good cards for making purchases and (b) I'm not much of a purchaser. It's just not something I do a lot of.

I can't argue with you on that. I agree. Close that puppy out.

Re: Closing credit cards

red259 — Sun, 25 Dec 2016 20:28:17 GMT

@Anonymous wrote:
My eyes aren't good enough to see whether any of the cards in your signature are store cards. If any of them are, that might feature in your decision making process. The insurance industry notes how many store cards and gives you a penalty (on their score) for each one that you have.

FICO does not impose a penalty for store cards, but the insurance industry does.

Why would the insurance company do that? Not saying you are wrong, but I don't see why they would care about such a thing?

Re: Closing credit cards

Anonymous — Mon, 26 Dec 2016 01:02:32 GMT

Hi Red259. They do this because, in their words....

Insurance industry research shows that consumers who utilize department store accounts to purchase merchandise have more insurance losses.

See reason codes 3082-3084 in the LexisNexis Auto Insurance code list.

I don't know why people who use store cards are more likely to either have accidents or get in more costly accidents than those who do not, but that is apparently so.

Re: Closing credit cards

Benzman — Mon, 26 Dec 2016 02:47:08 GMT

I've closed and/or merged over 20+ accounts in the past year with no issues whatsoever, but maintained my util in doing so.

Oldest CL is from 2003. Current AAoA is 2yrs3mos..

Chop away my friends!

Re: Closing credit cards

909 — Mon, 26 Dec 2016 02:03:00 GMT

909 wrote:
I have a dumb Barclaycard Apple rewards card. It has a $2K CL and they won't raise it w/out a HP. It earned 3x rewards for an iPad purchase but it won't fully cover a MacBook purchase. It's the last card I have with a CL below $9K and I haven't appreciated the service I've received. The only reason I keep it is to help my AAoA down the road and concern that cancelling it would harm my scores.

Question: I have six other revolvers, 5 opened in 2016 and one opened in 2012. I also have a mortgage and car loan. Oldest account is 28 years (closed) and AAoA is about 5 years. Should I be concerned about closing the Barclay card from an AAoA or score perspective?

Thanks.

CreditGuyinDixie wrote:
Nope, closing it will not alter your AAoA at all. Is it clear to you why it won't alter your AAoA? Real important for you to understand that.

It might have had a (slightly) bad effect on your score if you had very few open credit cards. In order to get the highest scores you need 3 or more cards. In your case, even after you close this, you will still have SIX other credit cards. So you are fine.

The only concern I have is how old this particular Barclay card is. You don't tell us that. We need to know how old this card is, and whether it is your oldest open account. If your oldest open account is another account -- what account is that and how old is it?

With these questions I am trying to get clear what will happen to your "Age of Oldest Account" when your ultra old but closed account falls off.

Thanks for always trying to educate forum members!

The Barclay is in fact my newest card at about 7 mos. old. My oldest account at EX and EQ isn28 years old and was closed in 2008 so it is scheduled to drop off in 2017. It will be replaced by a closed USBank account that is my oldest card at TU at 14.9 years. It will drop in 2023 or so. As I understand, my OA at EQ and EX will drop from 28 years to 15 years in 2017. In 2023, that closed USBank acct, opened in 2002, will be about 21 years old and will drop to be replaced by a CapOne card opened in 2012. A few old mortgages will be dropping off in the meantime.

OA and AAoA can be a bit tough to calculate without a spreadsheet.

FICO today via CCT:

EX and EQ: OA, 28.5 years, AAoA, 6.6 years

TU: OA, 14.9, AAoA, 5.2 yrs

Re: Closing credit cards

Anonymous — Mon, 26 Dec 2016 05:06:15 GMT

As your youngest card then there is no issue whatsoever with closing it. It it was your oldest open card then in ten years the decision to close it would have caused your "age of oldest account" to drop. (Since in 9.9 years it would be your oldest account.) But since you have other open cards older than it that you are keeping, the decision to close it now will never affect your "age of oldest."

Good decision!