topic Re: When to start closing high interest rate cards? in Rebuilding Your Credit

When to start closing high interest rate cards?

tammyjk — Thu, 20 May 2021 08:08:10 GMT

3 years post BK and I finally have all the credit I need. I have less than 1k on credit cards now that I will be transferring to 0% interest cards and getting rid of them. My ? is do I just get rid of those bottom feeder cards all at once or a little at a time? I was approved for a 20k card yestrerday so it's not going to hurt my utilization to get rid of the 500 dollar cards. I just don't want to hurt my credit score. I am almost to 700 and it's been a difficult journey.

Re: When to start closing high interest rate cards?

Anonymous — Thu, 20 May 2021 10:29:58 GMT

The only way it's going to hurt your scores is if closing them would push you over a usage threshold, which you've said isn't an issue. I'd close them out maybe one a month or so, starting with any that have monthly maintenance fees. Be sure to check your accounts for a couple months after closure to be sure no fees get slipped in after the fact (it has happened). I'd hate to see you lose all your progress because of a shady $8 fee slid onto a closed card.

Re: When to start closing high interest rate cards?

tammyjk — Thu, 20 May 2021 12:43:46 GMT

Thanks for the suggestion. I think one a month is a good way to go. Thanks for the fee comment too! I would be heartbroken if that happened.

Re: When to start closing high interest rate cards?

Horseshoez — Thu, 20 May 2021 13:19:16 GMT

I agree with @Anonymous's comments; the flip side is, if the high interest credit cards have no annual or monthly fees, and you aren't carrying a balance, why bother closing them? Said another way, two of my three credit cards have interest up in the mid-20% range; I use them on a daily basis, and I have yet to pay a penny of interest. I mean, I wouldn't care if the interest rates were 50% or higher, it still wouldn't matter, nor would it to cause me to close the cards.

Re: When to start closing high interest rate cards?

tammyjk — Thu, 20 May 2021 13:51:18 GMT

Sometimes too much available credit can be a bad thing too. We are probably looking to buy a home in the next year or two and I know that was something they looked at when I bought my home before. Besides all of that, I hate a wallet full of plastic. I probably have 15 credit cards or more at this point. It's just too much.

Re: When to start closing high interest rate cards?

GApeachy — Thu, 20 May 2021 14:02:03 GMT

@tammyjk Also, closing the small cl card(s) to get avg. available cl's up in case that factored in to what sl would be considered on the next app.

Re: When to start closing high interest rate cards?

tammyjk — Thu, 20 May 2021 14:27:29 GMT

Great comment! It would look rather funny to have cl of 500 and then 3k and a 20k cl. Those 500 dollar cards could really bring it down.

Re: When to start closing high interest rate cards?

CH-7-Mission-Accomplished — Thu, 20 May 2021 21:10:02 GMT

I would close the low limit/high interest cards. I think the advice is good to close one a month unless you are paying monthly fees or will come up against an annual fee in the next month or two. I was going to say just make sure you have at least three revolvers reporting so you don't get dinged, but with 15 you're good there. One other thing about having too many cards is that the more cards you have, the greater the chance of somehow, some way missing a payment and tanking your scores 100 points. Maybe there was some annual fee or other BS fee and you thought since you hadn't used the card in a year you didn't need to check it. I personally have a 10 card limit. And as others have said, higher limits lead to higher limits, so get those crappy rebuilders in the closed account section sooner rather than later. Good luck.

Re: When to start closing high interest rate cards?

Nikita2008 — Thu, 20 May 2021 23:28:37 GMT

I'm going with the one a month strategy for now, 1 last month, one this month, one next month, after that I'll close the other 3 in the fall as the annual fees come up. The only one I intend to keep is Capital One as it is my oldest TL 21 years, and no annual fee.

Re: When to start closing high interest rate cards?

805orbust — Fri, 21 May 2021 14:35:08 GMT

PLEASE take @Anonymous's advice and check those accounts for 6 weeks or so after closing. Smart decision too. I do differ on one basis tho... I would slash and BURN!!!! 😂

Congrats on this milestone. That is a job well done.

Re: When to start closing high interest rate cards?

Nikita2008 — Fri, 21 May 2021 22:46:15 GMT

Agreed.I'm checking my reports daily to make sure that accounts are closed. Also calling the 800 numbers to ensure 0 balance. Most of them cut off online access.