HELP - Closing Cards to Prevent Tempation?

[FeedMeCredit]

Okay, I'm admitting it. I have no self-control apparently. I cut up my cards awhile ago, even reported them "lost" and never activated the replacements, so I'd have nothing to pull out of my wallet. But I recently found a way, using the virtual card number my bank so conveniently spits out. I'm tired of the CC temptation and apparently can't handle it, so I'm closing accounts. I just don't want to ruin my credit in the process! 

In addition to these CCs, which I will pay off in full as I close, I have a car loan that's always paid on time. 

Thinking about closing - Newest to oldest...

- Cap1 $500 limit (low limit, crappy rewards) < CLOSED as of today

- Citi $1,600 limit (mileage for airline that rarely flies out of my new closest airport) 

- Citi $2,060 limit (mileage for same airline, originally had a $4k limit but they're chasing it down)

- Cap1 $3,600 limit (I think 1.5% back, I don't bank here anymore)

- Citi $3,500 limit (no rewards, opened for balance transfer offer) 

Keeping Open - High limits, best rewards, oldest accounts, will leave locked...

- Mastercard $9,400 limit 2% back on everything, no foreign/travel fees

- Visa $8,000 limit 1.5% back on everything, no foreign/travel fees

How badly can I expect closing accounts to hurt my credit score in the long term? I'll be applying for a home loan no sooner than 12 months from now. If I only have the above two accounts ($17,400 combined limits) and 0% utl, will I be able to get a 700+ score?

[Red1Blue]

If there is no AF it is better to leave them open and sock drawer them. Closing accounts will reduce your availabile credit. It is better to leave it alone if they are not costing you AF.

[Yasselife]

For optimal scores, have 3 cards minimum, and let a small balance [8.9%] report. This method is called AZEO [all zero except one], we use it before applying for credit.

I hope that answers your question. All else is up to you. Every person is different and if temptation is a problem for you then, take necessary action to avoid getting in trouble.

[FeedMeCredit]

Thank you, that is very helpful! I did not know 3 cards was optimum, I'll take that into consideration. I'll also look into the AZEO method. 

[Remedios]

OP, what kind of temptation are you talking about? 

If this is about spending, how will closing low limits cards help you while you're keeping  ones with whom you can do the most damage?

If this is about applying for additional credit, how will closing existing accounts help you not open future ones? 

I'm a little bit confused here 

[FeedMeCredit]

I have never carried a balance on my high limit cards, I simply don't touch them. These low limit cards racked up balances due to unforeseen circumstances last year. Things are better now, but now that I'm working to pay them down, I find myself putting small charges on them "here and there" with plans to pay for that purchase right away, but it ends up blending into the existing balance. I tell myself, "Oh, I'll be making a BIG payment anyway in a week or two, it's fine..." but it's prolonging the payoff process. 

So, I'm tired of accidentally using the "credit card float" (to borrow a YNAB term) due to the "I'm paying it anyway" mindset.

On top of that, I got the cards in question during an app spree ~2 years back and they serve me no good purpose. Most are low limits, like the Cap1 I paid off and closed today. The reward programs aren't great and interest rates are a tad high.

The only reason I'd leave them open is if closing this many accounts would negatively impact my long-term credit score when I apply for a home loan in 12+ months. Otherwise, I just don't see any benefit to keeping them. 

[Yasselife]

If you currently have an overall balance higher than 28.9% I advise you not to close them until you lower the debt under 8.9%... closing will lower your overall credit limit and raise your utilization %.
I went through the same as you're describing, $10k in debt and I've been giving it all(LOL) to it pay off; and this happend to me even having some knowledge about finances and credit. 

[FeedMeCredit]

I'm definitely looking at it from an utlization perspective, but are there impacts beyond that? Planning to have $0 balances in the next 5 months.

Assuming I have 0% utl in 12+ months when I go to apply for a home loan, will closing these accounts today impact my score negatively in some other way? That's what I'm trying to figure out, but credit scores really are a puzzle!  

[Anonymous]

^^^ in that situation, no they most likely will not hurt you. Most closed accounts stay on your reports for up to ten years after closing and continue to contribute to age factors.

I would advise you not to close them though, especially if you can give them to a trusted family member to keep for you, or put them in a safety deposit box at your bank, somewhere to get them out of reach. As for the electronic access to the card numbers, that's a hurdle you'll just have to learn to overcome by keeping the mortgage goal in mind.

[kiea]

It seems to me, you don't carry a balance on the higher limit cards because you have the lower limit cards available for you to use.  If you close all of the  lower limit cards you will end up using the higher limit cards more.  

You should hide the cards somewhere safe so you won't use them.  If you want to close them, I don't think it's a good idea to close all of them within the same time period 

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@FeedMeCredit wrote:

I have never carried a balance on my high limit cards, I simply don't touch them. These low limit cards racked up balances due to unforeseen circumstances last year. Things are better now, but now that I'm working to pay them down, I find myself putting small charges on them "here and there" with plans to pay for that purchase right away, but it ends up blending into the existing balance. I tell myself, "Oh, I'll be making a BIG payment anyway in a week or two, it's fine..." but it's prolonging the payoff process. 

So, I'm tired of accidentally using the "credit card float" (to borrow a YNAB term) due to the "I'm paying it anyway" mindset.

On top of that, I got the cards in question during an app spree ~2 years back and they serve me no good purpose. Most are low limits, like the Cap1 I paid off and closed today. The reward programs aren't great and interest rates are a tad high.

The only reason I'd leave them open is if closing this many accounts would negatively impact my long-term credit score when I apply for a home loan in 12+ months. Otherwise, I just don't see any benefit to keeping them. 

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