topic Re: Itch to close some and apply... Any suggestions? in Credit Cards

Itch to close some and apply... Any suggestions?

BabyBlue — Sun, 13 Feb 2011 19:33:44 GMT

Hi everyone, it has been a while since I last posted, but I have been visiting the boards on a regular basis.

I have been credit gardening for a while and I am considering applying for a new card. I somehow accumulated a few branded cards that I am considering closing. If I do that, I may apply for another bank card so that I have more options in case BOA goes nuts again

I am not sure what my current scores are - probably somewhere in 730-770 range. I have only one inquiry within the last year - from 4/2010 for Pottery Barn card. I also have a car loan to be paid off next month and two student loans in deferment (55k total for graduate school). I will probably be applying for a mortgage in about 1.5 - 2 years.

Would you have any suggestions on which (and how many) cards to close? And what other cards to consider? I would like low APR, no annual fee, probably a cash back card.

My current credit card mix is as follows:

BOA BankAmericard - CL 10k/opened 2/2005 (not reporting CL to all CBs, high balance around 6.5k)

BOA World Points MC - CL 5k/opened 9/2009

Home Depot - CL 3k/opened 5/2009

Pottery Barn - CL 3k/opened 4/2010 - used only once since opened but I will probably leave it open.

Shell - CL 2400/opened 5/2006 - not used much

Sears - CL 3k/opened 7/2006 - not used much

Many thanks!!!!

Re: Itch to close some and apply... Any suggestions?

smc733 — Sun, 13 Feb 2011 20:00:17 GMT

@BabyBlue wrote:
BOA BankAmericard - CL 10k/opened 2/2005 (not reporting CL to all CBs, high balance around 6.5k)
BOA World Points MC - CL 5k/opened 9/2009
Home Depot - CL 3k/opened 5/2009
Pottery Barn - CL 3k/opened 4/2010 - used only once since opened but I will probably leave it open.
Shell - CL 2400/opened 5/2006 - not used much
Sears - CL 3k/opened 7/2006 - not used much

Keep green, close red. Home Depot you'll want if you're getting a house, blue, MAYBE keep the Sears for appliances.

Have you considered a Discover More card as an additional bank card?

Re: Itch to close some and apply... Any suggestions?

jefftca925 — Sun, 13 Feb 2011 20:40:42 GMT

I wouldn't close any of them. The Shell card is contributing to you AAoA...most of the cards are helping utilization. You can always SD the ones you don't use and periodically show them the light of day on occasion. As far as a new card I'd go with a Chase Freedom card, Discover (not a huge fan of them), or maybe an Amex of some kind. If you travel (or will in the future) an AAdvantage card, United Mileage Plus, or a Southwest Airlines card would be a good addition (there are some nice bonus point signup offers out there).

Closing CCs isn't beneficial unless they are charging you an AF and you aren't using it. Otherwise they are helping you. Just PIF every month or watch your utilization if you don't.

Re: Itch to close some and apply... Any suggestions?

smc733 — Sun, 13 Feb 2011 21:06:04 GMT

Not exactly true. Many mortgage lenders will ask people to close a few trade lines if they have too many, or are extended too much credit. When prepping for a mortgage, it is best to get rid of as many unused/un-needed tradelines as possible. They'll still help AAoA for 10 years, too.

Re: Itch to close some and apply... Any suggestions?

BabyBlue — Sun, 13 Feb 2011 21:25:50 GMT

Thank you guys for your responses. I am considering closing cards because I just need to simplify my life. I somehow feel that keeping cards open and making myself remember to use them every few months is a silly thing to do. I know some people will not agree with me, but that's how I look at it. I am not concerned with losing the lines because I generally PIF way before the statement cuts and have an insignificant balance reporting on one or two cards only.

I am keeping HomeDepot and Pottery Barn. Once I graduate in May I will need them much more than I do now I will probably close both Sears and Shell. By the time they fall of my reports, I am hoping to have another one or two cards of decent age that I will be able to use more often. So even if my AAoA drops some at the time, it should not matter to me that much.

So which cards should I consider? I would like to avoid Chase and Discover, and probably CUs. I am not willing to pay an annual fee. As I mentioned before, low APR, probably cash back would satisfy me. I would also be willing to consider a superb rewards card and do a product change on my BankAmericard Power Rewards to a BankAmericard Cash Rewards.

Re: Itch to close some and apply... Any suggestions?

JaseT — Sun, 13 Feb 2011 21:48:27 GMT

@BabyBlue wrote:
Thank you guys for your responses. I am considering closing cards because I just need to simplify my life. I somehow feel that keeping cards open and making myself remember to use them every few months is a silly thing to do. I know some people will not agree with me, but that's how I look at it. I am not concerned with losing the lines because I generally PIF way before the statement cuts and have an insignificant balance reporting on one or two cards only.

I am keeping HomeDepot and Pottery Barn. Once I graduate in May I will need them much more than I do now I will probably close both Sears and Shell. By the time they fall of my reports, I am hoping to have another one or two cards of decent age that I will be able to use more often. So even if my AAoA drops some at the time, it should not matter to me that much.

So which cards should I consider? I would like to avoid Chase and Discover, and probably CUs. I am not willing to pay an annual fee. As I mentioned before, low APR, probably cash back would satisfy me. I would also be willing to consider a superb rewards card and do a product change on my BankAmericard Power Rewards to a BankAmericard Cash Rewards.

Why are you wanting to avoid CUs?

Re: Itch to close some and apply... Any suggestions?

BabyBlue — Sun, 13 Feb 2011 22:03:22 GMT

I know - strange, right? I am a member of one and I hate the fact that they hard pull when you join or open an additional account, including checking and savings. It is not worth it to me. Besides, not all of them report to all CBs, which seems a nonsense to track or inquire about. We all have our quirks and that's mine

Unlike a lot of people, I have been really happy w/ BOA. They gave me my first credit card ever in 2006 with a 5,200 CL (I had a really thin credit file then - just one AU card). They took really good care of me with generous automatic CLIs that stopped when CL reached 21k. In 2009, I myself lowered CL to 15k and then split it into two separate cards.

Re: Itch to close some and apply... Any suggestions?

JaseT — Sun, 13 Feb 2011 22:05:33 GMT

@BabyBlue wrote:
I know - strange, right? I am a member of one and I hate the fact that they hard pull when you join or open an additional account, including checking and savings. It is not worth it to me. Besides, not all of them report to all CBs, which seems a nonsense to track or inquire about. We all have our quirks and that's mine

Unlike a lot of people, I have been really happy w/ BOA. They gave me my first credit card ever in 2006 with a 5,200 CL (I had a really thin credit file then - just one AU card). They took really good care of me with generous automatic CLIs that stopped when CL reached 21k. In 2009, I myself lowered CL to 15k and then split it into two separate cards.

Not trying to soud rude, but I don't understand your thinking on several issues....

Re: Itch to close some and apply... Any suggestions?

BabyBlue — Sun, 13 Feb 2011 22:23:05 GMT

No offense taken. Are you referring to my lowering the BOA credit line? They had been softing me every other day for several weeks and I was concerned about a CLD. I quit my job shortly before then and started a full-time grad program, never charged a lot in a month & I did not need the line anyway. 15k was what I was happy to settle with. I split the card into two because BOA would not do a product change to a Master Card or AMEX from the card that I had then. My school accepts only Mastercards and AMEX and I wanted the ability to pay miscellaneous charges online.

Different people, different priorities. What may seem a good solution to you, does not have to be one for me. But, it does not mean that we can't learn from each other, right?

Re: Itch to close some and apply... Any suggestions?

BabyBlue — Mon, 14 Feb 2011 02:18:23 GMT

Thank you for your suggestions. I applied and was approved for a bank card a few minutes ago. I am not sure about the CL yet and will have to wait until I receive the card to find out about it.

Many thanks!

Re: Itch to close some and apply... Any suggestions?

jefftca925 — Mon, 14 Feb 2011 07:02:32 GMT

@smc733 wrote:
Not exactly true. Many mortgage lenders will ask people to close a few trade lines if they have too many, or are extended too much credit. When prepping for a mortgage, it is best to get rid of as many unused/un-needed tradelines as possible. They'll still help AAoA for 10 years, too.

I have NEVER heard of a mortgage lender EVER advising someone they needed to close CC accounts. If someone's utilization was too high they might suggest that they pay down their balances to help their FICO scoring but to close them all together have not heard that. And I know from experience... (was advised the exact opposite).

Re: Itch to close some and apply... Any suggestions?

Anonymous — Wed, 16 Feb 2011 22:47:20 GMT

I am a loan officer and I can tell you that you need to be careful when it comes to closing tradelines. It could benefit your credit to close some of the accounts, but it also can hurt you.

example: you have 10 open tradelines that have an average history of 60 months and don't owe more than 50% on any of them, then you decide to close a 5mth old credit line. this would most likely help your score.

example: you have 7 open tradelines with a much newer credit history of an average of 14mths, then you close out a line that you haven't used in awhile but it was your oldest card with 70 mths. this might hurt your credit.

and if we are talking about less than 5 tradelines then keep them all open and debt should be at 50% or less.

for more help let me know

[Edited to remove personal information] -Marinevietvet, myFICO moderator

Re: Itch to close some and apply... Any suggestions?

smc733 — Wed, 16 Feb 2011 22:30:59 GMT

I've quite commonly heard of mortgage lenders saying

"your credit is fine, but you have so much available credit compared to your income, you pose a risk with this mortgage unless you lower that"

Re: Itch to close some and apply... Any suggestions?

haulingthescoreup — Wed, 16 Feb 2011 23:13:03 GMT

@smc733 wrote:
I've quite commonly heard of mortgage lenders saying

"your credit is fine, but you have so much available credit compared to your income, you pose a risk with this mortgage unless you lower that"

I've heard of this, although I don't recall hearing (or reading) this from someone who actually went through it. I'm beginning to think that it's one of those Internet legends that just go on and on, like the one about how FICO stopped scoring AU accounts 2 years ago (they didn't.)

And six cards, as the OP has, is pretty much nuthin' these days.

Anyway, when it comes to getting ready for a mortgage, I wouldn't try to guess what lenders would want, other than having debt paid off and savings piled up. If a lender wanted me to close perfectly good accounts with spotless history, I'd first think about getting a different lender, but otherwise, I'd only close something if I was specifically told to do so.

I can barely keep up with my own mind any more, much less try to read the minds of lenders...

Meanwhile, OP, the usual advice is not to close cards unless there's a fee, or you've got too many to keep track of and you're sweating losing track of payments, or there's just something so spectacularly annoying about one that you know that you will be a happier individual after kicking it to the curb. You might check out fused's Closing Credit Cards for some perspective (don't remember if anyone referenced that.)

Also don't remember if anyone mentioned this one (see, I said I was losing my mind), but as other rewards cards cut back --PenFed, for one --Chase Freedom is looking better. The basic 1% is eh, but sometimes the quarterly rewards are fantastic. They've had six months in a row (two quarters) of 5% cash back on groceries, and they're currently giving 5% cash back on drugstores as well.