Closing Cards????

[Anonymous]

Hello Everyone,

since you are the experts and I'm barely reading Credit Scoring for Dummies, I wanted your input. So I have seen everywhere that to keep a better score you should only apply when needed. However I have the idea that the most cards I have the better payment hisrtory i can build. Per instance, at this moment I have a thin file with 2 secured cards and 2 store cards. I would love to add more store cards (APR doesn't matter since I am always planning on paying on full). In my mind I can see having these cards as the oldest ones and use them periodically so they don't close. Since they have no AF I don't see why they can't be forgotten in my sock drawer. On the other hand I see a lot of people stating they have close such and such card since they were not used and they were just dead weight. Do lenders prefer a person with a few tradelines than a person that has too many, Note that AAoA has nothing to do since I only want to open them as soon as possible so I don't open these cards down the road. Do I make sense??

[TRC_WA]

I personally don't care if the lenders think I have too little or too many cards.  I only apply for credit that is useful to me.  If it isn't useful I don't apply.  If it was once useful but is no longer useful, I close it.

I opened in December a Nordstrom, Amex, Discover, and Sallie Mae.

I closed a 76 and Chevron gas, Walmart and Apple card.  All 4 were from 12-16 months old and all 4 would never see the light of day again because purchases that would have went on those cards will from this day forward go on Sallie Mae/Amex/Discover.

The 4 cards were 100% worthless... and are now closed.

[kdm31091]

There are widely differing opinions on this, with most people falling into either the - "don't ever close something that has no AF" camp or the "close it if it's useless" camp.

I'm with "close it if it's useless". It remains on your report for 10 years as a positive account, even if it's closed, so it's not a big deal for AAOA. Why keep something that has no benefit? If you are never going to use a card, and/or get no benefit out of it, it's just one more account to keep track of, monitor for fraud, etc. Too me, it's hassle and clutter for no real gain. You do not have to SD cards in leiu of closing them. People do it but it doesn't mean your score is going to tank if you close a card. If it is your ONLY card that may be different but I don't get that impression from your post.

If you no longer need something or it isn't growing with you - move on.

[core]

I will simply say this:  I wish I had thirty or so 20+ year old "useless" open tradelines on my report right about now.  Presently, each new account I open for the signup bonus or other benefits does affect my AAoA.  Whereas if I had kept all those old accounts, a new account would hardly make a _dent_ and I could apply for things with some degree of impunity.  I wish my AAoA could afford to take on 10 new cards every year.  It can't, because of the decisions I made in the past.

Now if you're not into applying for the hottest cash back cards when they come out, the 70k signup bonuses, and all that jazz, then that's great.  Are you sure you're going to feel the same way in 10 years?  The free money that they are handing out is substantial.  Maybe you make 200k a year and $10k in bonuses a year is not worth the trouble to you.  Things can always change though.

[kdm31091]

Yeah, but you have to be able to afford to spend enough to get the bonuses. If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus. I don't bring home $4000 a month. I would end up carrying a balance to get the bonus and paying off the balance would pretty much end up negating the bonus or minimizing it quite a bit.

Bonuses are great but worthless if you are going into debt to get them.

[core]

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@kdm31091 wrote:

If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus.

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Not entirely true.  But MS-like methods are frowned upon here so I'll leave it at that.  It's up to each cardholder how they want to play the card game.

[Anonymous]

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@kdm31091 wrote:

Yeah, but you have to be able to afford to spend enough to get the bonuses. If your income isn't that high, it's going to be tough to spend $4000 for something like CSP to get the bonus. I don't bring home $4000 a month. I would end up carrying a balance to get the bonus and paying off the balance would pretty much end up negating the bonus or minimizing it quite a bit.

Bonuses are great but worthless if you are going into debt to get them.

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Wow I just said exactly this in the GC

As far as this post goes I'm in the close it if you dont need it group And I'd do it again if necessary

[Anonymous]

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@core wrote:

I will simply say this:  I wish I had thirty or so 20+ year old "useless" open tradelines on my report right about now.  Presently, each new account I open for the signup bonus or other benefits does affect my AAoA.  Whereas if I had kept all those old accounts, a new account would hardly make a _dent_ and I could apply for things with some degree of impunity.  I wish my AAoA could afford to take on 10 new cards every year.  It can't, because of the decisions I made in the past.

Now if you're not into applying for the hottest cash back cards when they come out, the 70k signup bonuses, and all that jazz, then that's great.  Are you sure you're going to feel the same way in 10 years?  The free money that they are handing out is substantial.  Maybe you make 200k a year and $10k in bonuses a year is not worth the trouble to you.  Things can always change though.

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But this analysis neglects the potential cost of those tradelines in the first place.  Maybe they led to too many inqs and caused you to get denied or bad terms on cards you really wanted then.   Maybe some issuers thought you had too much credit and refused to give you their card.   And finally, AAoA isn't such a huge part of the score.

(And this isn't even considering the major parts of "close useless cards" camp, the need to track, the need to periodically spend etc)

And it looks like "too many accounts" might somehow be bad.   My latest EX report flags one item, my 43 open and closed accounts, as negatively impacting my score.

(for some reason this is 9 more accounts than shows on TU, but OK).   So it really isn't totally clear cut

[kdm31091]

I agree that I think there is a point of "too many accounts", so building up with useless accounts or not closing useless cards isn't a good idea. Creditors can see if you already have lets say 30 accounts, and if 10 of them are useless, do you really want to be declined for a card you DO want because you already have too much credit?

You can't get infinite credit. It's based on your income too, not just credit score. There is a peak and beyond that you will likely be declined unless you improve income. Therefore, getting rid of useless cards can allow you to get cards you actually want. Unless you make tons and tons of money this is something to consider.

[Anonymous]

With all I have learned this past 5 months trying to build a credit I am completely sure I do not intend to apply for something I cannot pay in full with my monthly income or Emergency fund. I understand that the more cards you have, the more you will need to monitor for fraud or ID theft but that can be easily monitored with MPM. I may be too aggressive in trying to build a credit, I just am not looking for applying for any car loan or mortgage within the next 3 years so I want to make sure I'm taking all the steps so i don't have to worry about not enough history  or an account dropping my AAOA, (which right now is pretty low).