topic Canceling/Getting Rid of Credit Cards in Credit Cards

Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Wed, 07 Nov 2018 22:10:13 GMT

HELP! What should I do? I have about 12 cards and am thinking about closing most of them.

I went through a period of "how many cards... and how high can I get my credit limits". Honestly, it became a game to see how much credit could I get. (I also learned that my self-worth isn't tied to how much credit I could get.)

I now have about $245,000 of available credit (Chase, AMEX, Discover, Barclays, Capital One, BofA) with an average monthly credit card utilization of not more than 1-2% (paid off monthly). My credit score is about 825.

I use two cards: Chase Sapphire Preferred ($40K CL) and an AMEX Everday Blue Preferred ($25K CL). Do I dump everything else and just keep these two cards, or??? Will it adversely affect my credit score to cancel over $100K of credit?

Should I have an "emergency" I have a (relatively large) line of credit that charges @ the prime interest rate, so I would never need to make a large CC purchase, unless I was going for points/rewards - and then I'd pay it off immediately.

Re: Canceling/Getting Rid of Credit Cards

SBR249 — Wed, 07 Nov 2018 22:59:03 GMT

Canceling cards won't impact your AAoA as your closed accounts will still report for up to 10 more years. If you cancelled half your total CL and you are currently using 1-2% PIF, then your util would still be around 2-4% which is nothing to worry about.

As for having an "emergency" line of credit, I'm always of the opinion that that's what an emergency fund is for. If you have to urgently access enough funds to the point that you cannot save enough emergency cash to cover that, then you should look into beefing up your emergency fund or having more reasonable funding sources lined up like a personal line of credit. CCs are just too touchy of a beast for this sort of thing. Obviously that's my personal opinion.

Re: Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Wed, 07 Nov 2018 23:10:26 GMT

@SBR249 wrote:
Canceling cards won't impact your AAoA as your closed accounts will still report for up to 10 more years. If you cancelled half your total CL and you are currently using 1-2% PIF, then your util would still be around 2-4% which is nothing to worry about.

As for having an "emergency" line of credit, I'm always of the opinion that that's what an emergency fund is for. If you have to urgently access enough funds to the point that you cannot save enough emergency cash to cover that, then you should look into beefing up your emergency fund or having more reasonable funding sources lined up like a personal line of credit. CCs are just too touchy of a beast for this sort of thing. Obviously that's my personal opinion.

Thanks. Yeah, I didn't mention my savings. I have never needed to use the credit line, I just listed it, as I know some people have credit cards for emergencies. Thanks for the input. (There's just something scary of cancelling accounts... and something freeing at the same time.)

Re: Canceling/Getting Rid of Credit Cards

NRB525 — Thu, 08 Nov 2018 00:39:42 GMT

OP if the cards do not seem to be helpful to you, closing them is sometimes a good choice..

What are your goals now with credit? Are you traveling? The two cards you use are in two different points systems, is that by design?

If you list out your cards and some of the reasons you do not use or want them, that can help solidify the decision to close.

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 01:12:41 GMT

I was nervous as well closing cards a while back but let me tell you.. it is a great feeling getting rid of the dead weight!

Re: Canceling/Getting Rid of Credit Cards

kdm31091 — Thu, 08 Nov 2018 01:22:21 GMT

I really don't think you need to sweat it. As long as your utilization will remain low, there really is no set number of cards you need to have for any reason. There can be (minor) scoring benefits to 4-5 cards, but it really is irrelevant (IMO) once you have a score like yours. You won't be denied for anything you may need, loan wise.

I would close whatever isn't useful to you. Life is too short to waste time managing accounts that give you no benefit.

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 03:01:58 GMT

Sounds like a plan but canceling so many ekk maybe keep atleast a hand full! I’m In This stage also and just want simplicity !

Re: Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Thu, 08 Nov 2018 02:57:01 GMT

Thanks for all these great comments. My only goal/objective is to keep my credit score in above 800, which it is.

I didn't know if canceling cards would/will adversely affect me down the road. I have destroyed all the cards I don't use.

I also like having relationships with these financial instuitions; and there is some (pyschological) comfort in having access to that much credit - sometimes I think I want to get more just because I can. Which ultimately is just plain stupid.

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 03:04:11 GMT

Destroying the cards won’t stop them from working and soon creditors wil cancer for no activity anyways so u will get your wish!

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 03:17:20 GMT

@Anonymous wrote:
I was nervous as well closing cards a while back but let me tell you.. it is a great feeling getting rid of the dead weight!

Stopped here to say this.

Instead I’ll quote and kudo you because I feel the same way

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 12:40:34 GMT

Maybe play just the tip with them. Close one and see how it feels. If it feels good then close another. Continue until you’re completely satisfied.

Re: Canceling/Getting Rid of Credit Cards

AverageJoesCredit — Thu, 08 Nov 2018 13:12:32 GMT

@Anonymous wrote:
Maybe play just the tip with them. Close one and see how it feels. If it feels good then close another. Continue until you’re completely satisfied.

☺

Re: Canceling/Getting Rid of Credit Cards

UpperNwGuy — Thu, 08 Nov 2018 13:43:47 GMT

I was in your situation about 18 months ago. I had 15 cards scattered across about 9 lenders. Yet I was only using 2 cards regularly, the Chase Sapphire Reserve and the PenFed Power Cash Rewards.

I went on a cancellation spree one morning in June 2017, and now I am down to 7 cards at 4 lenders. Here was my logic on what to cancel and what to keep:

-- Cancel all store cards.

-- Keep all 4 cards from PenFed and NFCU because these two credit unions have been my primary financial institutions for several decades.

-- Keep the 2 Chase cards (CSR and United Explorer) because I get high value from one and perks from the other.

-- Keep my UNFCU card because it is the only card I have that defaults to chip+PIN like European cards.

-- Cancel everything else.

I cancelled 8 cards and gave up about $60,000 in overall credit limit. My credit scores were unaffected by the cancellations. One of the cards I cancelled was 44 years old. I no longer have a relationship of any kind with Amex, Citi, Capital One, or Synchrony.

Re: Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Thu, 08 Nov 2018 14:46:18 GMT

@Anonymous wrote:
Destroying the cards won’t stop them from working and soon creditors wil cancer for no activity anyways so u will get your wish!

I have several cards that don't get any use. No issues w/ any bank/financial institution - including getting additional automatic increases.

I know the accounts are still f active. Duh. I have just felt no need to keep the physical cards.

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 15:14:33 GMT

Another option, if you are wanting to keep credit line high is to combine limits. If several Amex cards then go online and transfer limits to your BlueCash (I think you can do all but 500) then close the remaining accounts. I know several financial instutitions allow this.

Re: Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Thu, 08 Nov 2018 15:32:14 GMT

Thanks... this is what I wondering. Great to read that there were no adverse impacts. I have two super old cards with silly low limits and I've kept them simply because of (perhaps perceived perception) that they help w/ my AAoA.

Edit/question: Am I mistaken in thinking that an long-standing open account adds adds to the AAoA - or is that about the inception/opening of a card/account?

Thanks again.

@UpperNwGuy wrote:
I went on a cancellation spree one morning in June 2017, and now I am down to 7 cards at 4 lenders. Here was my logic on what to cancel and what to keep:
-- Cancel all store cards.
-- Keep all 4 cards from PenFed and NFCU because these two credit unions have been my primary financial institutions for several decades.
-- Keep the 2 Chase cards (CSR and United Explorer) because I get high value from one and perks from the other.
-- Keep my UNFCU card because it is the only card I have that defaults to chip+PIN like European cards.
-- Cancel everything else.

I cancelled 8 cards and gave up about $60,000 in overall credit limit. My credit scores were unaffected by the cancellations. One of the cards I cancelled was 44 years old. I no longer have a relationship of any kind with Amex, Citi, Capital One, or Synchrony.

Re: Canceling/Getting Rid of Credit Cards

kdm31091 — Thu, 08 Nov 2018 15:34:00 GMT

The account being open vs closed is irrelevant to your AAOA once it is open. The account is going to continue to age and contribute to AAOA regardless of being open/closed.

After 10 years, a closed account does drop off, and it can hurt your AAOA at that time. However, your score is so high I really would not stress much over it. Besides, AAOA is not remotely the most important component of score. You will not suddenly see a major tanking of your score over it.

So for the next 10 years, whether the accounts are open or closed is irrelevant as far as AAOA.

Re: Canceling/Getting Rid of Credit Cards

Anonymous — Thu, 08 Nov 2018 21:01:44 GMT

As you know this question is very unique to each credit profile. In my case I dropped (closed) eight credit cards over two and a half years loosing about $80,000 in CL's. As has been posted already, the AAOA goes for about ten years and my credit file is thick and will likely not take a great drop. Too many cards to try and keep track of and active. My spend just isn't there anymore and several cards keep changing apr and benefits so their usefulness changes. Got rid of them and gained a great piece of mind

Re: Canceling/Getting Rid of Credit Cards

AverageJoe1970 — Thu, 08 Nov 2018 23:12:43 GMT

Hmm... so in 10 years, could/will I see a drop in my score with 8 cards dropping off my report?

@kdm31091 wrote:
The account being open vs closed is irrelevant to your AAOA once it is open. The account is going to continue to age and contribute to AAOA regardless of being open/closed.

After 10 years, a closed account does drop off, and it can hurt your AAOA at that time. However, your score is so high I really would not stress much over it. Besides, AAOA is not remotely the most important component of score. You will not suddenly see a major tanking of your score over it.

So for the next 10 years, whether the accounts are open or closed is irrelevant as far as AAOA.

Re: Canceling/Getting Rid of Credit Cards

wasCB14 — Fri, 09 Nov 2018 01:13:00 GMT

@AverageJoe1970 wrote:
Hmm... so in 10 years, could/will I see a drop in my score with 8 cards dropping off my report?

@kdm31091 wrote:
The account being open vs closed is irrelevant to your AAOA once it is open. The account is going to continue to age and contribute to AAOA regardless of being open/closed.

After 10 years, a closed account does drop off, and it can hurt your AAOA at that time. However, your score is so high I really would not stress much over it. Besides, AAOA is not remotely the most important component of score. You will not suddenly see a major tanking of your score over it.

So for the next 10 years, whether the accounts are open or closed is irrelevant as far as AAOA.

I've heard (but my history is too short to have personally observed) that closed accounts can occasionally drop off a bit earlier than 10 years. That is, I don't think it's always exactly 10 years.

Keep in mind two other things:

-An 825 is great (assuming it's out of 850), and a little drop even from here isn't likely to have any negative effect on your actual access to credit.

-The cards you do keep open will continue to age. In ~10 years, the accounts you close now will fall off, but this drop will be at least somewhat offset (perhaps fully, or more than offset, I'm not sure) by the increased age of the cards you keep open.