topic Re: Should I cancel some credit cards? in Credit Cards

Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 20:32:31 GMT

I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

Thanks!

Re: Should I cancel some credit cards?

Meanmchine — Wed, 17 Jul 2019 20:56:58 GMT

@Anonymous wrote:
I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

Thanks!

Thats your answer

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 20:59:28 GMT

Thats your answer

Not really. Is it the debt of my mortgages or the unused debt of the credit cards?

Re: Should I cancel some credit cards?

rbentley — Wed, 17 Jul 2019 21:08:19 GMT

@Anonymous wrote:
Thats your answer
Not really. Is it the debt of my mortgages or the unused debt of the credit cards?

Unused credit is not a debt for DTI purposes.

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 21:11:21 GMT

"Unused debt" by definiton cannot be used in a DTI ratio calculation so that's not the answer. A credit line is not a debt, the actual debt occurs when there's a balance on the credit card. Your credit application denials are most likely due to your current mortgage obligations and your maxed out HELOC.

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 21:30:24 GMT

OK, that's exactly the sort of answer I was looking for. Unfortunately it's not the one I wanted to hear... :-(

Re: Should I cancel some credit cards?

SouthJamaica — Wed, 17 Jul 2019 21:44:17 GMT

@Anonymous wrote:
I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

Thanks!

You've been turned down for credit cards because of "debt to income ratio"? It's funny, I've been turned down many times but never saw that given as a reason. Are you sure those are the words?

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 22:56:08 GMT

DTI denials tend to be CU based.

Big banks just say No you have too much credit already when you hit a percent of income like 50%-75% with that particular lender.

OP... who are you applying with?

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 23:01:58 GMT

If you have credit cards that you don't use, there's no harm in closing them down. The only exception would be if they are non-AF cards that are either your oldest or one of your oldest accounts, as allowing it to continue to age would be a good thing for your file 10+ years from now relative to closing it/them today. Anything else though, I'd just close it.

Re: Should I cancel some credit cards?

Anonymous — Wed, 17 Jul 2019 23:18:14 GMT

Per AJC

Re: Should I cancel some credit cards?

AverageJoesCredit — Wed, 17 Jul 2019 23:12:57 GMT

Lets remember to be FSR here, thank you everyone. As to the case of OP, he did ask about closing credit cards so its perfectly ok to respond to that aspect of the question.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 01:42:55 GMT

You've been turned down for credit cards because of "debt to income ratio"? It's funny, I've been turned down many times but never saw that given as a reason. Are you sure those are the words?

I know I've been turned down for credit due to DTI ratio. I may be conflating a loan application my wife and I submitted with credit card applications, but it's happened more than once.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 01:47:55 GMT

@Anonymous wrote:
DTI denials tend to be CU based.

Big banks just say No you have too much credit already when you hit a percent of income like 50%-75% with that particular lender.

OP... who are you applying with?

Hmm, is that really how it works? In that case it would benefit me to cancel some cards. I don't remember the last card I was rejected for; it was several weeks ago and I generally don't keep track, I just throw away the rejection letter and forget about it.

The only bank where my credit limit approaches that percentage is American Express.

Re: Should I cancel some credit cards?

pinkandgrey — Thu, 18 Jul 2019 02:04:12 GMT

I’m not entirely sure what the question is, but as for closing cards, I would do it. You have good, established credit. I would close any and all cards you don’t want or use. Closing unused cards just simplifies things so much in my opinion. I have never given any thought to the age of the card I want to close. If I don’t want it, I close it. Done.

Good luck!

Re: Should I cancel some credit cards?

HeavenOhio — Thu, 18 Jul 2019 02:33:29 GMT

Welcome, @Anonymous.

@pinkandgrey, the problem is that RWS has a bunch of mortages and a HELOC that's almost maxed. That results in a DTI that's unusually high. Even though he has no trouble making payments, he has trouble getting credit cards due to DTI.

RWS, I'm not sure that closing cards is going to help. If available credit were the problem, there'd probably be some clue in the denial reasons. You say you "never use" your revolving credit, I think that's a more likely reason. You might help yourself by making sure all your cards show recent usage.You don't have to add to your DTI to do this. Simply pay off your charges before the reporting date.

Otherwise, I think bringing the HELOC balance down could be a big help.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 03:36:18 GMT

@Anonymous wrote:
I don't remember the last card I was rejected for; it was several weeks ago and I generally don't keep track, I just throw away the rejection letter and forget about it.

I might suggest being a bit more conservative in your approach. If you can't remember the card you were rejected for just a few weeks ago it probably means you're applying for products that you don't really need, unnecessarily apping for a ton of products, etc. The taking on of unnecessary inquiries only gives potential lenders further ammo to say "no" the next time you app.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 11:42:58 GMT

@Anonymous wrote:
I might suggest being a bit more conservative in your approach. If you can't remember the card you were rejected for just a few weeks ago it probably means you're applying for products that you don't really need, unnecessarily apping for a ton of products, etc. The taking on of unnecessary inquiries only gives potential lenders further ammo to say "no" the next time you app.

I appreciate the concern, but no, that's not the case. I only apply for a new card when there's an extraordinary benefit, such as several hundred in cash for making a certain amount of purchases in the first three months. The reason I can't remember what card it was is that once I was rejected, I had no reason to think about it any more. It's not like I get these offers constantly. I didn't get my FICO score as high as it is by being careless.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 14:25:41 GMT

I might then suggest that you come up with a way of tracking what you app for. If you can't remember what it was a few weeks ago, who's to say that you won't app for the same product again in attempt for the same SUB and receive another [unnecessary] denial.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 14:43:51 GMT

@Anonymous wrote:
I might then suggest that you come up with a way of tracking what you app for. If you can't remember what it was a few weeks ago, who's to say that you won't app for the same product again in attempt for the same SUB and receive another [unnecessary] denial.

I would say w/ the OP's info provided you're knocking on the wrong door here.

800+ FICO (check)

Multiple Mortgages / Invetsments (check)

Ability to manage / use a HELOC instead of running up CC's / lower rate and tex deductible (check)

Picks up SUB's when they become available (check)

I think everything is fine and OP was just wondering about the denial reason on the DTI excuse and whether or not closing cards would help alleviate the issue. Reading between the lines the issue may be the high balance on the HELOC at the moment and once that's paid down again the same app could result in an approval. Tracking applcations the way we've invested time in may not be a priority for OP since everything outside of a single app denial is running fine.

If it aint broke, don't fix it.

Re: Should I cancel some credit cards?

Anonymous — Thu, 18 Jul 2019 17:53:32 GMT

@AverageJoesCredit wrote:
Lets remember to be FSR here, thank you everyone.

OK, I Googled this initialism and couldn't find anything that would appear to fit the context (I'd like to think it's Five Second Rule, but I'm pretty sure that's not it). Could you enlighten me please?

ETA: found it: FSR, FS&R = Friendly, Supportive & Respectful

I've been on many forums over the years and this is the first time I've seen that one...