topic Re: Sock Drawer in Credit Cards

Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 14:15:06 GMT

Ok so I currently have way more cards than I need my current lineup is:

Chase Freedom

Chase Sapphire Preferred

Chase Priority Club

AMEX BCE

Discover It

USAA Platinum Master Card

NFCU nRewards

USAA Secured Visa

USAA Visa

USAA AMEX

I hear a lot of people talking about sock drawering cards, but I don't truly understand it. I don't think I'm going to use the bottom 3 cards ever again. The secured Visa will go away in a couple of months when my CD matures and I don't Re-up. The other two I want to sock drawer. Can I just not use them anymore? Will that hurt my credit? My utility is currently 1% and I always PIF for all of my cards. The credit limits on those cards are pretty low anyway (1k, 1k and 1.5K) so it won't affect my utility at all. I don't think they would reduce my credit limits since they are already so low but I'm afraid of a lender initiated closing if I never use them. Do they do this? Does this hurt your CS? Thanks in advance guys.

Re: Sock Drawer

Tommy5746 — Tue, 07 May 2013 14:21:47 GMT

If you dont use your credit cards for an extended period of time, they will usually send you a notice that if you dont use it they will close it out.. so use them all but for small purchases just to keep them active.. also, if you dont use the card or use it very sparingly they may slash your CL.. So, if the CL is 5k and you rarely use it they may cut it down to 2.5K or lower.. this is one reason why you should only apply for credit you need.. So, my suggestion is to use the cards and let them grow with you.. Good Luck!!

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 14:28:57 GMT

@Tommy5746 wrote:
If you dont use your credit cards for an extended period of time, they will usually send you a notice that if you dont use it they will close it out.. so use them all but for small purchases just to keep them active.. also, if you dont use the card or use it very sparingly they may slash your CL.. So, if the CL is 5k and you rarely use it they may cut it down to 2.5K or lower.. this is one reason why you should only apply for credit you need.. So, my suggestion is to use the cards and let them grow with you.. Good Luck!!

Thankss for the info Tommy. maybe my post wasn't clear. I did apply for this credit to use it. I was building my credit when I attained the bottom three cards. Now I have better cards and want to use those for the bulk of my purchases going forward. Is there a specific reason why you think I should keep the accounts open? It won't effect my Fico score if I close them now and the accounts will still report for ten years. I'm just not sure why you think I should keep the cards when I now qualify for much better rewards and rates with other cards and it won't affect mmy Util or AAoA. Am i missing something?

Re: Sock Drawer

Anonymous — Tue, 07 May 2013 15:20:23 GMT

Generally speaking, the most popular reasons to close cards are fees (AF/monthly/etc) and most people don't recommend closing cards without fees because keeping them open really doesn't hurt you. Hence the popularity of the sock drawer.

If you don't want to keep them open though, it's certainly a personal choice.

There are a few things you should consider though:

If there's an emergency would having the extra credit available (either to use, or to offset your util on your other cards) be useful?

You say that closing them won't effect your util, but unless you always carry a 0 balance across the board, closing them will indeed effect your util at least a little bit.

I don't worry much about AAoA changes when closed accounts drop off personally, because I figure at that point everything else on my report will be significantly older anyway lol

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 15:59:37 GMT

Yeah I always intentionally let one balance register just so that I have some utility. I always PIF. But you make a good point. maybe I will keep them open. I just think it would be easier to close them instead of constantly using them and then paying them off. It seems like most people are saying keep them open. Would it make any difference if I mention that I have about 50K worth of credit and I'm talking about closing a total of 3.5K lines of low rewards credit while spending more on high reward credit cards? I also don't plan to app for a CC for a long time (at least for a year or two, probably more).

Re: Sock Drawer

Anonymous — Tue, 07 May 2013 16:13:45 GMT

I have a few cards that I dont use for anything and I try to just buy one thing on them ever 2 months or so. Or if they have some kind of promo, I'll use it then (like Gap had a promo a few months ago that if you used the card 4 times outside of Gap brands, you'd get a $10 certificate or something like that, so I bought 4 packs of gum seperately, kept the card active and got money to use at Gap). No reason to close an no-AF card, especially if you've had them for awhile. But the issuer may choose to close it if you don't use it.

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 16:55:48 GMT

I would agree if this was a store card. But USAA is stingy, I get no CLIs and I get no special bonuses that out do my current cards. Maybe I will keep them open because of everything you guys have said but I just don't see how it really helps and it just seems like an extra hassle.

Re: Sock Drawer

Anonymous — Tue, 07 May 2013 17:05:40 GMT

Honestly, i wouldn't be too shy about closing cards that dont really offer anything and are to never be seriously used again in the instance that they aren't like 10 years older than everything else on your profile, and all your other cards are like under 3-4 years of age.

But if were talking about closing a 10 year old tradeline when i've got a few other accounts in the 7-9 year range, screw it, its gone if doesn't do anything for me.

Re: Sock Drawer

Anonymous — Tue, 07 May 2013 17:06:52 GMT

I think that given your relatively strong feelings on the issue, and the additional info of having 50K credit with 3 of 10 cards making up less than 10% of your available credit - that you should probably worry less about how we feel and do what you want

Re: Sock Drawer

Anonymous — Tue, 07 May 2013 17:08:33 GMT

SD the ones that you don't intend on using and/or have high APRs / low limits. You can use them sparingly just to keep them "open" if you'd like. I have "active" cards, each with a MR charge on them, with auto-pay set for the minimum payment amount. Just in case I forget.

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 17:26:52 GMT

@Anonymous wrote:
I think that given your relatively strong feelings on the issue, and the additional info of having 50K credit with 3 of 10 cards making up less than 10% of your available credit - that you should probably worry less about how we feel and do what you want

Thanks. I actually don't have strong feelings. I just thought closing would be easier than keeping them open and trying to make sure I spend a little on it ever month then pay it off. I mean I can just use the money on my other 7 cards and get good rewards. I was thinking that maybe I was missing something and it would actually hurt me in the long run.

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 20:46:24 GMT

Does it matter If I just don't use the cards until they decide to cancel them. Does that look different on my credit report than if I cancelled it myself?

Re: Sock Drawer

unc0mm0n1 — Tue, 07 May 2013 23:12:54 GMT

Bump. Does anyone know the answer to the question above.

Re: Sock Drawer

indiolatino61 — Wed, 08 May 2013 01:03:56 GMT

@unc0mm0n1 wrote:
Ok so I currently have way more cards than I need my current lineup is:

Chase Freedom
Chase Sapphire Preferred
Chase Priority Club
AMEX BCE
Discover It
USAA Platinum Master Card
NFCU nRewards
USAA Secured Visa
USAA Visa
USAA AMEX

I hear a lot of people talking about sock drawering cards, but I don't truly understand it. I don't think I'm going to use the bottom 3 cards ever again. The secured Visa will go away in a couple of months when my CD matures and I don't Re-up. The other two I want to sock drawer. Can I just not use them anymore? Will that hurt my credit? My utility is currently 1% and I always PIF for all of my cards. The credit limits on those cards are pretty low anyway (1k, 1k and 1.5K) so it won't affect my utility at all. I don't think they would reduce my credit limits since they are already so low but I'm afraid of a lender initiated closing if I never use them. Do they do this? Does this hurt your CS? Thanks in advance guys.

Closing accounts will only affect your utilization, as the closed account will stay on your CR for 10 years, if I'm not mistaken. People that always PIF, however, will most likely not be affected at all. I don't think people that have $20K+ in total credit have too much to worry about in regards to closing some unused CCs.

Re: Sock Drawer

unc0mm0n1 — Wed, 08 May 2013 02:04:26 GMT

Thanks for the insight.

Re: Sock Drawer

unc0mm0n1 — Wed, 08 May 2013 03:30:24 GMT

@unc0mm0n1 wrote:
Does it matter If I just don't use the cards until they decide to cancel them. Does that look different on my credit report than if I cancelled it myself?

I found the answer from modcut Director of public relations for Fico:

[Bank initiated] card cancellations can impact your credit score in a couple of ways. Credit card companies provide a code for every account they close, denoting the reason the card was canceled. A cancellation due to delinquency or default will ding your credit score. Any other reason should not.

So I will just sock drawer them until they expire or USAA decides to close them. Then i'll start my ten years from that point. Thanks everybody for the great answers and insight.

Thread was edited to remove individual's names.

Thanks,

webhopper