topic Re: Closed credit cards in Credit Cards

Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 00:50:27 GMT

Going through my credit cards and decided to consolidated or cancel a few credit cards.

AOD CREDIT UNION 5K

LOWES CC. 20K

AMEX HILTON. 11.9K MOVED TO ANOTHER CC

HOME DEPOT. 20K

U.S BANK BUSINESS. 3K

As I progress to a higher tax bracket,( and older) I think it's a good idea to cancel or consolidate CCs. Easier to manage and less chance of fraud. Never used any of the above cards much so it was a no brainer. My credit score will probably drop however, it will still be in the high 700s.

Re: Closed credit cards

NoHardLimits — Sun, 22 Sep 2024 01:12:40 GMT

I agree with your general reasoning for closing/consolidating unused accounts. If your signature is up to date, the new closures should not have much of a negative impact.

Why do you think your credit score will drop? Will your aggregate utilization % increase significantly? Are you closing your oldest accounts? Will your percentage of accounts reporting a balance increase to over 50%. You may be pleasantly surprised to find no score decrease at all.

Re: Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 02:50:40 GMT

@NoHardLimits wrote:
I agree with your general reasoning for closing/consolidating unused accounts. If your signature is up to date, the new closures should not have much of a negative impact.

Why do you think your credit score will drop? Will your aggregate utilization % increase significantly? Are you closing your oldest accounts? Will your percentage of accounts reporting a balance increase to over 50%. You may be pleasantly surprised to find no score decrease at all.

I sure the score will drop. I had 380k in available credit before closing 4 personal cards. Now it's about 310k. Had a 2% utilization (0% promo) and now it will creep up. No accounts were older than 4 years. Not really concerned about the score. Next year I'll be going for the chase reserve or preferred and an airline card that gives companion tickets. Finally there are cards I have that I will continue to cancel or consolidate. Navy Federal accounts are up for consolidation, Best Buy Visa, First tech Credit Union and USAA Amex will probably be chopped. Amex Business Gold will not be renewed. Sometimes it's good to "clean the closets" and start new.

Re: Closed credit cards

NoHardLimits — Sun, 22 Sep 2024 04:34:50 GMT

@Gmoney144 wrote:
@NoHardLimits wrote:
I agree with your general reasoning for closing/consolidating unused accounts. If your signature is up to date, the new closures should not have much of a negative impact.

Why do you think your credit score will drop? Will your aggregate utilization % increase significantly? Are you closing your oldest accounts? Will your percentage of accounts reporting a balance increase to over 50%. You may be pleasantly surprised to find no score decrease at all.

I sure the score will drop. I had 380k in available credit before closing 4 personal cards. Now it's about 310k. Had a 2% utilization (0% promo) and now it will creep up. No accounts were older than 4 years. Not really concerned about the score. Next year I'll be going for the chase reserve or preferred and an airline card that gives companion tickets. Finally there are cards I have that I will continue to cancel or consolidate. Navy Federal accounts are up for consolidation, Best Buy Visa, First tech Credit Union and USAA Amex will probably be chopped. Amex Business Gold will not be renewed. Sometimes it's good to "clean the closets" and start new.

Closing younger unused accounts can often be done with very little impact on aging metrics. As far as aggregate utilization creeping up, as long as you keep it under 8.9% that shouldn't create a negative score impact. Closing/downgrading cards with annual fees is prudent when they no longer provide enough value to offset the fees.

It seems like you will still have a sufficient number of cards and ample credit limits even if you go onto a second round of "closet cleaning". If you wind up with Sapphire Preferred or Reserve, you may want to also think about whether you want to keep your Ink Preferred. You could consolidate that limit into Ink Cash, unless you find the Preferred's rewards categories valuable enough to offset the annual fee.

Re: Closed credit cards

ElvisCaprice — Sun, 22 Sep 2024 07:19:36 GMT

Another option is to CLD them to a safer limit. Eliminate as much cash advance as possible. But I'm sure you have cards that overlap each other and thus best to determine which cards are not the most lucrative and eliminate. Sometimes if it's a card with a one time use on a annual basis, if there is a SUB, eliminate, and hit the SUB again with a new sign up, when you have use for.

Re: Closed credit cards

ptatohed — Sun, 22 Sep 2024 07:27:03 GMT

You didn't say which AOD card you closed but, assuming the 3% CB VS, there are people here who would give up a ~~testie~~ (ok, inappropriate).... I mean give up a limb, to have the 3% CB anything AOD VS, even in its now $1500/mo capped state. Why close it?

Re: Closed credit cards

unsungivy — Sun, 22 Sep 2024 14:40:33 GMT

@ptatohed wrote:
You didn't say which AOD card you closed but, assuming the 3% CB VS, there are people here who would give up a ~~testie~~ (ok, inappropriate).... I mean give up a limb, to have the 3% CB anything AOD VS, even in its now $1500/mo capped state. Why close it?

I was wondering the same thing. Even with only a 5k limit and cashback on the first $1500 monthly... that seems crazy to ditch it at this point.

Re: Closed credit cards

Yoshi1981 — Sun, 22 Sep 2024 15:48:15 GMT

Sometimes I have to remember a lot of members here aren't representative of the majority. Totally get consolidating/closing. Most people aren't practicing AZEO, churning for subs, applying with 750+ scores, or Pokémon card collecting and they do fine. Once your score is where you're comfortable and you have cards that cover a few of your highest spend categories then that might be enough rather than worrying about an extra .5 - 1% that this or that new card might cover. 🤷🏾‍♀️ If your score drops a few points after closing, big whoop.

Re: Closed credit cards

unsungivy — Sun, 22 Sep 2024 16:45:47 GMT

@Yoshi1981 wrote:
Sometimes I have to remember a lot of members here aren't representative of the majority. Totally get consolidating/closing. Most people aren't practicing AZEO, churning for subs, applying with 750+ scores, or Pokémon card collecting and they do fine. Once your score is where you're comfortable and you have cards that cover a few of your highest spend categories then that might be enough rather than worrying about an extra .5 - 1% that this or that new card might cover. 🤷🏾‍♀️ If your score drops a few points after closing, big whoop.

Oh, it's not about scores or whatever.

It's that AOD is considered a REALLY good card (and a ton of hoops had to be jumped through to get it in the first place), and this may be literally the first time anyone has closed one ON PURPOSE. 😱

Re: Closed credit cards

Yoshi1981 — Sun, 22 Sep 2024 16:52:14 GMT

@unsungivy I've seen the thread, it seems like a great card. But maybe no longer enough value to keep for this person since worth is subjective. If I had their income I probably wouldn't think twice about closing it either.

Re: Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 17:04:12 GMT

@unsungivy wrote:
@ptatohed wrote:
You didn't say which AOD card you closed but, assuming the 3% CB VS, there are people here who would give up a ~~testie~~ (ok, inappropriate).... I mean give up a limb, to have the 3% CB anything AOD VS, even in its now $1500/mo capped state. Why close it?
I was wondering the same thing. Even with only a 5k limit and cashback on the first $1500 monthly... that seems crazy to ditch it at this point.

If I'm doing the math correctly $1500 spend per month maxed out is $45 per month? AOD was better when it was unlimited. Maybe I should have kept it but my major spends such as groceries, ev and gas, utlities, restaurants, streaming services are all 5%. Travel is through Amex platinum so I'm banking points.

Re: Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 17:21:40 GMT

@unsungivy wrote:
@Yoshi1981 wrote:
Sometimes I have to remember a lot of members here aren't representative of the majority. Totally get consolidating/closing. Most people aren't practicing AZEO, churning for subs, applying with 750+ scores, or Pokémon card collecting and they do fine. Once your score is where you're comfortable and you have cards that cover a few of your highest spend categories then that might be enough rather than worrying about an extra .5 - 1% that this or that new card might cover. 🤷🏾‍♀️ If your score drops a few points after closing, big whoop.
Oh, it's not about scores or whatever.

It's that AOD is considered a REALLY good card (and a ton of hoops had to be jumped through to get it in the first place), and this may be literally the first time anyone has closed one ON PURPOSE. 😱

Honestly, after jumping through hoops to get the card I hardly ever used it. Besides my cash back lane for home spend, everything else was on my Amex business Platinum. I started my financial journey some 6 years ago and with discipline, luck and great advice in regard to investments I am doing well. Not everyone utilizes their CCs the same. I've had up to 24 accounts(not counting lines of business credit) and I could sock drawer but I had a small isssue with fraud and it's best if I consolidate and cancel cards. And yea, I would probably regret closing AOD. Lol

Re: Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 17:22:23 GMT

@unsungivy wrote:
@Yoshi1981 wrote:
Sometimes I have to remember a lot of members here aren't representative of the majority. Totally get consolidating/closing. Most people aren't practicing AZEO, churning for subs, applying with 750+ scores, or Pokémon card collecting and they do fine. Once your score is where you're comfortable and you have cards that cover a few of your highest spend categories then that might be enough rather than worrying about an extra .5 - 1% that this or that new card might cover. 🤷🏾‍♀️ If your score drops a few points after closing, big whoop.
Oh, it's not about scores or whatever.

It's that AOD is considered a REALLY good card (and a ton of hoops had to be jumped through to get it in the first place), and this may be literally the first time anyone has closed one ON PURPOSE. 😱

I'm the first? Probably so. Lol

Re: Closed credit cards

Aim_High — Sun, 22 Sep 2024 22:11:41 GMT

It's good to "clean house" sometimes, @Gmoney144. Congrats!

Most of your closures sounded perfectly reasonable and thoughtful. I'm in-tune with several of the other responses that expressed surprise at closing the AOD Visa with 3%, even at a $1,500 monthly cap. That's 3% on up to $18,000 annually, much higher than the normal caps on a 3%-earning card, and you have complete flexibility in what MCC you earn the rewards. Earning 3% on $18K is worth $540 a year, or $180 more than you'd earn on a 2% card. Before I closed your AOD, I would have closed your Apple card (3%-2%-1%,) your AMEX Blue Cash Everyday (3% in selected categories with $6K combined cap), or your NFCU cashRewards (1.5-1.75%). AOD, in my opinion, is possibly even a better overall card than your your Discover IT or Chase Freedom since (if) you use all the rotating categories on either of those cards at 5% ($6K), you'd have $300 plus 1% everything else compared to AOD's $540. (That means to get the extra $240 with those cards, you'd have to spend $30,000 annually including the full $6K in those categories to earn the same cash rewards you would with $18,000 spend on AOD on anything you choose!) But, if it's closed, it's closed.

I agree with @NoHardLimits that your FICO isn't likely to drop. The cards will normally continue to report on your credit for ten years, although that is not guaranteed. And with utilization at 2% and those limits you reported, I'm calculating your aggregate utilization would only go up about a half percentage point, not nearly enough to be significant to FICO.

Sometimes, less is more! Congrats!

Re: Closed credit cards

Gmoney144 — Sun, 22 Sep 2024 22:10:15 GMT

@Aim_High wrote:
It's good to "clean house" sometimes, @Gmoney144. Congrats!

Most of your closures sounded perfectly reasonable and thoughtful. I'm in-tune with several of the other responses that expressed surprise at closing the AOD Visa with 3%, even at a $1,500 monthly cap. That's 3% on up to $18,000 annually, much higher than the normal caps on a 3%-earning card, and you have complete flexibility in what MCC you earn the rewards. Earning 3% on $18K is worth $540 a year, or $180 more than you'd earn on a 2% card. Before I closed your AOD, I would have closed your Apple card (3%-2%-1%,) your AMEX Blue Cash Everyday (3% in selected categories with $6K combined cap), or your NFCU cashRewards (1.5-1.75%). AOD, in my opinion, is even far superior to your Discover IT or Chase Freedom since (if) you use all the rotating categories on either of those cards at 5% ($6K), you'd have $300 plus 1% everything else compared to AOD's $540. 240*.01. (That means you'd have to spend $30,000 annually on either of those cards to earn the same cash rewards you would with $18,000 spend on AOD.) But, if it's closed, it's closed.

I agree with @NoHardLimits that your FICO isn't likely to drop. The cards will normally continue to report on your credit for ten years, although that is not guaranteed. And with utilization at 2% and those limits you reported, I'm calculating your aggregate utilization would only go up about a half percentage point, not nearly enough to be significant to FICO.

Sometimes, less is more! Congrats!

My signature is incorrect. Discover was canceled last test. The Blue Cash Evseryday is now the Blue cash Preferred ala 0 fee upgrade. I could have used the AOD VISA for non-cat spend, however I send that to Bus Platinum and let my accountant figure it all out. $540 versus 50-70k in points.... I'll take points everytime.