topic Re: Clarification question about closing a card in Credit Cards

Clarification question about closing a card

Anonymous — Fri, 02 Apr 2010 02:06:06 GMT

Hello all,

I know there are a million posts on here about closing credit cards, but I am still confused about one thing. If I close a Chase Mastercard, will it affect my overall utilization? I am slightly confused about how they factor into the mix since they only report the highest balance instead of the limit. I'll give some specifics below in case they might help anyone answer my question.

Chase Freedom Mastercard $0bal/$8600 high bal/$14000 limit -------->this is the card I want to close opened 03/07

Nordstrom Signature Visa $560bal/$1500 high bal/$10000 limit------>always PIF opened 12/09

American Express Gold Rewards $92bal/$1750 high bal------------->always (obviously) PIF opened 12/01

Chase Slate Visa $0bal/$1800 high bal/$1900limit-------------->rarely use, has no rewards, also a closure candidate opened 03/08

BOA Worldpoints Visa $4500bal/$8300high bal/$10000limit----------->carry a balance due to low apr, always pay way more than minimum opened 06/08

My real FICO scores are all in the 730-740 range. I know I'm not "supposed" to close any credit card that doesn't have an annual fee. However, I don't really have time to exercise all these cards, and I'm afraid the ccc will close them. My reports are flawless and I don't want a "closed by creditor" to pop up on them.

Thanks!

Re: Clarification question about closing a card

Anonymous — Fri, 02 Apr 2010 02:56:47 GMT

Once you close the cards with 0 balance, the utilization will be calculated from the open accounts only.

Re: Clarification question about closing a card

Anonymous — Fri, 02 Apr 2010 10:38:31 GMT

I know a lot of people might disagree but I got rid of cards I no longer had use for. By the time the card falls off of your reports in 10 years all of your other accounts will be 10 years older. I still have to make a few more cuts in the next few Months.

Re: Clarification question about closing a card

austinguy907 — Sat, 03 Apr 2010 01:25:27 GMT

I'm having a little bit of an issue trying to figure out why you want to throw away 14K in credit and jump your utilization up due to the balance you have on BoA card?

Chase will knock down your CL a couple times before they close it. In the meantime reap the rewards of $0 balance to keep your score up!

Dropping that card will reduce your total CL by over 1/3 and cause your score to drop since your utilization will jump up from 14% to 23% which will put you in a different bucket for scoring

Re: Clarification question about closing a card

Anonymous — Sat, 03 Apr 2010 22:24:31 GMT

Thanks for all your posts! The reason I am considering closing the card is that the $14000 limit doesn't show up on my reports.....Chase only reports my high balance. I didn't know if this was one of the cards that will affect my utilization, or if it is treated similar to an AMEX.

Re: Clarification question about closing a card

Anonymous — Sat, 03 Apr 2010 23:16:20 GMT

Probably handled like AMEX charge cards, for utilization.

Either way you don't have a lot of credit cards. Most people have many monthly bills that can be set up to charge to credit card. This is an excellent way to keep acoounts active. I don't see any advantage to closing.

Re: Clarification question about closing a card

okiesean — Sun, 04 Apr 2010 23:09:28 GMT

Hi, Have you considered trying a "product change" with Chase? They have alot of reward program types of cards and the Chase Freedom card is supposed to offer a 5% rebate in some categories on a rotating basis so it may be worth keeping it after all.

Things you could pay with your card to earn rewards would be: Cellphone bills, some home phone, cable and internet provider bills, some auto and home insurance companies now offer payment by credit card, gasoline, groceries, hotels and rental cars if you travel, and lots of little stuff you may already pay for with your debit card or another credit card. You dont have to use them a great deal but they do like to see regular useage.

I know Chase offers the Southwest Airlines Rewards Visa card that will let you earn points towards free tickets on Southwest Airlines.

Your Chase Freedom Card may not be helping you by reporting the limit but it should offer you some comfort that you do have it in case something happens or you need it. Credit has become a luxury that almost no one can afford not to have. I would maybe consolidate the two Chase cards and try for a store card like Macys or somewhere you shop locally that has sales or good deals every so often. You have obviously handled your credit quite good to have the limits you have. One last thing, you might look for a local credit union to join. Credit unions are less like to AA (adverse action like credit line decrease or closure) you for non use and high balances than a national bank like Chase and Bank of America. If you get a credit union card then you might rethink the cards you have and you would rather someone try to match your 14000 limit than the two 10000 limits you have on other cards.

Thanks everyone for your helpful suggestions!

Anonymous — Mon, 05 Apr 2010 20:53:15 GMT

Thanks everyone for your helpful suggestions!