Canceling/Getting Rid of Credit Cards

[AverageJoe1970]

HELP! What should I do? I have about 12 cards and am thinking about closing most of them.

I went through a period of "how many cards... and how high can I get my credit limits". Honestly, it became a game to see how much credit could I get. (I also learned that my self-worth isn't tied to how much credit I could get.)

I now have about $245,000 of available credit (Chase, AMEX, Discover, Barclays, Capital One, BofA) with an average monthly credit card utilization of not more than 1-2% (paid off monthly). My credit score is about 825.

I use two cards: Chase Sapphire Preferred ($40K CL) and an AMEX Everday Blue Preferred ($25K CL). Do I dump everything else and just keep these two cards, or??? Will it adversely affect my credit score to cancel over $100K of credit?

Should I have an "emergency" I have a (relatively large) line of credit that charges @ the prime interest rate, so I would never need to make a large CC purchase, unless I was going for points/rewards - and then I'd pay it off immediately.

[SBR249]

Canceling cards won't impact your AAoA as your closed accounts will still report for up to 10 more years. If you cancelled half your total CL and you are currently using 1-2% PIF, then your util would still be around 2-4% which is nothing to worry about. 

As for having an "emergency" line of credit, I'm always of the opinion that that's what an emergency fund is for. If you have to urgently access enough funds to the point that you cannot save enough emergency cash to cover that, then you should look into beefing up your emergency fund or having more reasonable funding sources lined up like a personal line of credit. CCs are just too touchy of a beast for this sort of thing. Obviously that's my personal opinion. 

[AverageJoe1970]

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@SBR249 wrote:

Canceling cards won't impact your AAoA as your closed accounts will still report for up to 10 more years. If you cancelled half your total CL and you are currently using 1-2% PIF, then your util would still be around 2-4% which is nothing to worry about. 

As for having an "emergency" line of credit, I'm always of the opinion that that's what an emergency fund is for. If you have to urgently access enough funds to the point that you cannot save enough emergency cash to cover that, then you should look into beefing up your emergency fund or having more reasonable funding sources lined up like a personal line of credit. CCs are just too touchy of a beast for this sort of thing. Obviously that's my personal opinion. 

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Thanks. Yeah, I didn't mention my savings. I have never needed to use the credit line, I just listed it, as I know some people have credit cards for emergencies. Thanks for the input. (There's just something scary of cancelling accounts... and something freeing at the same time.)

[NRB525]

OP if the cards do not seem to be helpful to you, closing them is sometimes a good choice..

What are your goals now with credit? Are you traveling? The two cards you use are in two different points systems, is that by design?

If you list out your cards and some of the reasons you do not use or want them, that can help solidify the decision to close.

[Anonymous]

I was nervous as well closing cards a while back but let me tell you.. it is a great feeling getting rid of the dead weight!

[kdm31091]

I really don't think you need to sweat it. As long as your utilization will remain low, there really is no set number of cards you need to have for any reason. There can be (minor) scoring benefits to 4-5 cards, but it really is irrelevant (IMO) once you have a score like yours. You won't be denied for anything you may need, loan wise.

I would close whatever isn't useful to you. Life is too short to waste time managing accounts that give you no benefit.

[Anonymous]

Sounds like a plan but canceling so many ekk maybe keep atleast a hand full! I’m In This stage also and just want simplicity !

[AverageJoe1970]

Thanks for all these great comments. My only goal/objective is to keep my credit score in above 800, which it is.

I didn't know if canceling cards would/will adversely affect me down the road. I have destroyed all the cards I don't use.

I also like having relationships with these financial instuitions; and there is some (pyschological) comfort in having access to that much credit - sometimes I think I want to get more just because I can. Which ultimately is just plain stupid.

[Anonymous]

Destroying the cards won’t stop them from working and soon creditors wil cancer for no activity anyways so u will get your wish!

[Anonymous]

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@Anonymous wrote:

I was nervous as well closing cards a while back but let me tell you.. it is a great feeling getting rid of the dead weight!

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Stopped here to say this.

Instead I’ll quote and kudo you because I feel the same way