Close or keep open?

[Uncle_Money]

Happy holidays all! I hope everyone is enjoying the holiday season.

I recently opened two new accounts.

Macy's -- Started reporting in October

Express -- Started reporting in November

Why on earth would I do this? Because I simply couldn't help myself as usual! I felt the need to app and so I did. I do, however, shop at both of these stores. Anyway, both have lousy CLIs ($500) and the APRs are outrageous. Both cards have a $0 balance.

These new accounts are hurting my score, according to FICO. What would happen if I closed both accounts? Would I see a rise in my score or should I just let them age?

Thanks,

UM

Message Edited by Uncle_Money on 12-27-2009 11:00 PM

[Anonymous]

If you never plan on using them I would just let them age. You might end up getting some nice CLI's in the future. You already lost the points for the new accounts hitting your reports anyway.

[score_building]

as they age in good standing, they will continue to build good history.  no reason to close since the inqs and new acct. damage has already been done, is only temporary and won't be reversed by closure.  Yeah, store cards typically have sky high APR, best to PIF as a rule so you can avoid those finance charges.  the trade off I guess is easier approval than most major cc...  IF you tend to carry balances on store cards, then you may be better off cutting off your access to the cards, since they could become a huge liability for you if not PIF.

otherwise, since you shop at the stores, you can of course continue to benefit from discounts offered to card holders and strengthen your history over time with these cards.  I wouldn't recommend more than a couple of store cards.  I regret having 4, if I could do it over I would have stuck with just one or 2 and saved that 'room' for major cc which have more utility overall.

also remember macy's in particular is generally a 'grower'.  many of us have seen REALLY nice growth way beyond the starting CL in a relatively short time frame, this growth will help give your a score boost as well.  you can request a GLI on the macy's card every 3-6 months. 

[Anonymous]

As others have said, UM, the new account damage has already been done, and you cannot reverse that.

Let 'em age, and when you use them, make sure you have the cash on hand first for your purchases, so that you can pay in full, preferably before the statement cuts, but at least before the due date.  No need to pay any interest on these cards..

[llecs]

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Uncle_Money wrote:

These new accounts are hurting my score, according to FICO. What would happen if I closed both accounts? Would I see a rise in my score or should I just let them age?

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If you close them, they'll continue to hurt your FICO score, for as long as they report...but you'll recover most of your points by 6 months and all of your points typically within a year. Ditto to everyone else...keep it open.

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Uncle_Money wrote:

Macy's -- Started reporting in October

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Macys is awesome with CLIs. A $500 CL now isn't that bad. Ask for a CLI after your third payment and you might get it. Most of us here ask for CLIs every 3 months and get it. I haven't been aggressive with my requests, but I started with $300 in Nov. 2007 and now have $3200 come exactly 2 yrs later. They also extended two 0% accounts, one is for $2500 and the other hasn't been activated.

[jefftca925]

I agree with everyone else.  If you can keep the cards under control they will benefit you in the long run.  Macys gives their cardholders some great perks including discounts and free services (if you spend some $$ there).  My fico took a hit recently with two new accounts but in a year my scores will probably better than they were before I got them.  As far as FICO scores go, it's the long term effect they'll have not the short term.  I'd keep them!

[Anonymous]

Best things to do when you have credit buyer's remorse are:

  1) Leave what you've got alone, and

  2) Stop app'ing and reformulate your strategy. Get back on track!

You don't get a store card for the APR. In the long run you will be very happy with Macy's. Use the card, PIF and request your guideline increases!

[okiesean]

llecs

do those 2 other accounts report on your credit report or are they just available internally at macy's until you actually put a balance on them?

Thanks

[llecs]

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okiesean wrote:

llecs

do those 2 other accounts report on your credit report or are they just available internally at macy's until you actually put a balance on them?

Thanks

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They all report. One is the reg. store charge ($3200 reported limit). One is the Spec. Event purchase account...got that for a mattress ($2500 reported limit). And the third reported in error with a $0 balance and no reported limit but can be activated for high ticket items like jewelry, furniture, etc. All three are different accounts and all 3 report every month. A CSR offered to remove the third account, but also said I was already approved if I wanted to use it. They'd assign a CL based on what I buy with the first purchase.