topic Re: Am I Making a Bad Decision? in Credit Cards

Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 16:37:28 GMT

Please give me some insight to these plans. I am very detail and planned oriented but I want to make sure I set good goals and am making the right decisions.

Short Term:

I know I have made a thread before about closing cards but I just want to get some things straight. I'm probably closing my BB&T card Friday. It is a hassle and now that I am banking with a CU I have no need to use it and I'm not too big on having to spend on/manage cards that I do not really want anyway. The problem is this was my first card. What I want to know is, a closed card remains on your report for 10 years right? Is that card, even though closed, still factored into AAoA for those 10 years? If that's the case, I cannot see why closing this one card is such a horrible thing. To me, it'd be good. I am also going to close KAY. Interest rate is crazy and if I really want to carry a balance I have cards with much lower rates and higher limits. Util change really will not be an issue closing these cards. I am carrying a balance on my Discover IT but I think I will transfer that balance to my Citi DP card in October and I will have 18 months no interest from the post date.

Long Term:

Right now all spending is going on my PRG. I am trying to meet the spending requirement for the bonus points. For now I am just spending as normal and gardening. The PRG is my newest account, just opened this week. After the spending is met on the PRG I will use it for my December trip. Everything associated with that trip will go on PRG. Otherwise I will use whichever other CC offers the best rewards according to where I am spending. Ok, here comes to good stuff but it may seem a bit crazy. December I can apply for another 3X CLI on my BCE. I will do that. I may try to get a SP CLI from Discover IT if I haven't received any auto luv. I want to buy my FICO EQ and if my score is significantly higher I will go up to the CU and refinance my auto loan. Now, I am pretty sure I am going to close the PRG sometime is 2014 and apply for the CSP to replace it. IMO the CSP, Freedom, and BCE will be the three best cards for the rewards I seek and for my spending patterns. I will probably close the Citi DP once the BT is PIF. That will leave me with a CSP, Freedom, Discover IT, BCE, BBY, and a CU Visa. So, when should i close the PRG and apply for the CSP? As early an January? Or wait until later in the year? The earlier I get it the more rewards I can have before my next trip but in all honesty I am in no rush at all to app. I want to wait until the perfect moment! Should I app for any other CLI? I'll probably try to get one on my CU card when I refinance as they will use same pull.

So, any comments or suggestions? In my mind I think I have a good solid plan and I am quite excited to see how things unfold. However, I am still young and a lot of you all have a lot more experience and credit knowledge than myself so I am open to anything you have to say!

Re: Am I Making a Bad Decision?

emptypockets — Wed, 17 Jul 2013 17:04:48 GMT

@Anonymous wrote:
Please give me some insight to these plans. I am very detail and planned oriented but I want to make sure I set good goals and am making the right decisions.

So, when should i close the PRG and apply for the CSP? As early an January? Or wait until later in the year? The earlier I get it the more rewards I can have before my next trip but in all honesty I am in no rush at all to app. I want to wait until the perfect moment! Should I app for any other CLI? I'll probably try to get one on my CU card when I refinance as they will use same pull.

So, any comments or suggestions? In my mind I think I have a good solid plan and I am quite excited to see how things unfold. However, I am still young and a lot of you all have a lot more experience and credit knowledge than myself so I am open to anything you have to say!

The card WILL report on your credit for 10 years even though it is closed. Make sure your utilization will not go dramatically up when closing any cards.

In regards to the PRG, since you have it and are actively using it (and accumulating points), you need to have a plan for what to do with leftover points when you cancel it. You can transfer the points to various travel partners, check the Membership Rewards portion of AMEX's site for details. If you truly don't thinl you will use it, cancel it right before the AF is due - they may offer you additional points. If not, cancel it at that point, just before you have to pay the AF.

I would ask for any CLI that would not result in a HP, and just continue to use the cards responsibly until you are ready to app again. I would hold off on cancelling any other cards right away, and just keep the Citi Card ( No AF, and you never know when you may need a BT in the future. Also, they have recently been having promos giving cash back for purchases). Citi will likely give you a SP CLI as well, as long as you use them regularly. It will be better to APP for CSP if you have as many limits as possible at 5k or above.

I would app for CSP after I got a CLI on AMEX, and the CU card (assuming you get a increase).

Good luck with whatever you decide.

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 19:07:55 GMT

Closed TLs can stay on your credit report UP to 10 years. There is no guarantee that they will stay for 10 years or they may stay on longer. While on your cr, a closed account will be factored into your AAOA. You've already answered my question about util, so the real question is if there isn't an AF, why close? The int rate on Kay's wouldn't be an issue if you do not use the card.

The PRG and the CSP are similar in they are travel/dining reward cc's. it really depends on which cc offers you the best reward based on your spending. I'm pretty sure I questioned whether or not this was the 'best' card for you in the long term. Having cc's with high AFs and the concerns on meeting the spend requirement should be considered not just the cosmetic/bragging rights associated with the cc.

I'd definitely wait to apply for the CSP after you receive your 3x CLI on BCE. Hopefully, you'll get an auto CLI on Discover. Since you just received the PRG, might as well keep it until the fee is due.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 19:37:56 GMT

@09Lexie wrote:
. You've already answered my question about util, so the real question is if there isn't an AF, why close?

This seems to be always a matter of personal preference, with the equivalent question, "If the card is of no value to you, why keep it open?"

It comes down to perceived usefulness in

1) keeping an additional TL, and some additional AAoA protection (but waaaay down the road, yes it is UP to ten years, and in some cases more, but in most cases it is at least several years),

versus

2) the minimalist approach, not having to worry about fraud, or keeping the card alive by making purchases (which take away from rewards on other cards) etc.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 19:51:47 GMT

I just don't want to have to deal with cards that are unused or that I don't really need. I want only the cards I'd actually use! I already have to put somethin on my CU, Discover, and Citi just to keep em active. I hardly use them, And don't get me wrong, I loveee the PRG and it will be super useful on my trip! I MAY keep it but I will definitely go for the CSP sometime in 2014.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 19:57:42 GMT

Yeah, longtimelurker, after going from 3 cards to 9 in a few months, I prefer the minimalist way! Just my main rewards cards! Ill keep the Citi card just because but that's the only one I'd keep. BBY has good no interest deals. Otherwise I prefer to have my main rewards cards but that's it!

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 20:04:19 GMT

They are both valid viewpoints (but the one I have is of course more valid!)

But I think it's reasonable to say that a good target, as you (generic you!) and your credit mature, would be to end up with a smallish number of credit cards each with a high credit limit, rather than keep every no AF card you ever obtained.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 20:11:36 GMT

@Anonymous wrote:
Yeah, longtimelurker, after going from 3 cards to 9 in a few months, I prefer the minimalist way! Just my main rewards cards! Ill keep the Citi card just because but that's the only one I'd keep. BBY has good no interest deals. Otherwise I prefer to have my main rewards cards but that's it!

if you prefer the minimalist way, you can just close the accounts then.

There's really no right or wrong with regards to stuff like this. It's all personal preference.

If it were you, I would sockdrawer those cards and let the lender close the cards. it will be labelled as "closed due to inactivity".

Some lenders close cards that hasn't been used for 3 months, while some do not even if the card hasn't been used for 3 years. It just really depends on which lender you're specifically talking about.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 20:19:57 GMT

Yeah, I'd say really, no more than 5-6 cards each with decent limits is a good goals and area for me to stay. That way I don't have a lot to keep up with and I can maximize my rewards. As far as me closing them or closed by lender I've heard different things, but I'd just prefer to close em myself.

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 20:21:26 GMT

If you prefer the minimalist way -like my DH- the by all means close them. My point was to clarify closed TLs may report up to 10 years and your recent threads about obtaining other cc's namely the week old PRG confused me. If you want cc's to churn for sign up bonuses that's fine; I have no problems with that and do it myself. If your AAOA is not a concern, then this plan will work for you. I suggest treading lightly on the one thing that takes time to recover- just my .02.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 20:29:55 GMT

Yeah, got yahhh. Ill close em. And for new accounts I don't want anything until next year sometime and then ill only get the CSP and some CLI. After that I think it'll be a good idea to garden those things like crazy because ill have to get a house one day. Even though I dislike the garden! Hahahaha!

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 20:31:52 GMT

Hey!! Don't throw dirt in the garden!

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 20:35:37 GMT

Hahaha believe me, I really plan to stay there for a while next year. I gotta get situated right first though!!

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 20:36:56 GMT

You are always welcome to plant your seedlings now.

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 21:24:03 GMT

Haha I guess I kinda have at least for a little while!

Re: Am I Making a Bad Decision?

oscar_actuary — Wed, 17 Jul 2013 21:58:02 GMT

@Anonymous wrote:
1) keeping an additional TL, and some additional AAoA protection (but waaaay down the road, yes it is UP to ten years, and in some cases more, but in most cases it is at least several years),

As I think more about this, it occurs to me that you are leaving them open, not for now, but for protection later, as you state.

Ideally, one can control their situation and AAoA, but perhaps something happens and 10 yrs from now, you really wish you had that extra few cards with 120+ months on them to keep your AAoA high. I'm getting tagged now on that on my score. I could have had 5 good cards over 15 years on there to offset these recent apps.

In other words, it actually drops off your report when you may most want it and when it does the most good.

That being said, I would not keep everything. With a little effort you can create a AAoA trajectory and perhaps avoid cutting it too thin

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 22:11:13 GMT

Exactly, my DH was suffering from closing his cc's 7-8 years ago and keeping only 1-2 'new cards'. Sure enough, when he did his one and only spree this March, his AAOA went from over 5 years to less than 10 months. If he had kept 1-2 more cc's open it would have helped. He had no idea those accounts he let close or he closed in 05-07 fell off his report early

Re: Am I Making a Bad Decision?

Anonymous — Wed, 17 Jul 2013 22:25:44 GMT

Well really these accounts I'm wanting to close are only a few months older than my BCE and Freedom so I'm really not losing much AAoA even if they dropped now I suppose.

Re: Am I Making a Bad Decision?

GatorGuy — Wed, 17 Jul 2013 22:56:56 GMT

@09Lexie wrote:
Exactly, my DH was suffering from closing his cc's 7-8 years ago and keeping only 1-2 'new cards'. Sure enough, when he did his one and only spree this March, his AAOA went from over 5 years to less than 10 months. If he had kept 1-2 more cc's open it would have helped. He had no idea those accounts he let close or he closed in 05-07 fell off his report early

Wow, and I was upset when my AAoA dropped by a year!

Re: Am I Making a Bad Decision?

09Lexie — Wed, 17 Jul 2013 23:05:30 GMT

@GatorGuy

Yep..he added 5 new TLs. It fell hard