How does combining CC accounts help ?

[Creditwiser]

So now that the cats out of the bag and the Cap One combining cards thread has blown up, I'm curious to learn exactly how this benefits anyone interested in combining cards/limits.  Certainly for some with a much lower APR on one card would benefit, but how does it benefit someone thats rebuilding.  I have two QS1 with 4k on one and 3.5k on another.  How would this affect my scores, my AAoA, etc if I closed one card and had a 7.5k limit on the other ?

[takeshi74]

It all depends on what one's goals and priorities are.  Consider the info in this thread linked in the Helpful Threads sticky:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/m-p/347190?jump=true

If one has a card that is of no use and one is looking to close it then transferring the available credit to a useful card that will be kept open would eliminate or at least partially mitigate any impact to utilization.

---

@Creditwiser wrote:

How would this affect my scores, my AAoA, etc if I closed one card and had a 7.5k limit on the other ?

---

Instead of picking solutions and trying to justify them start with what you're trying to accomplish and find solutions that fit.  Is your only concern your credit score?  At best, combining would provide no benefit to your score.  Combining generally only helps to mitigate the impact to utilization when closing a card.  However, it can also be beneficial if one needs more available credit on one card versus the other.

From a scoring standpoint you won't gain points.  The thread linked above explains the impact to AAoA from closure.

[Anonymous]

Agree!

I guess we'll just have to wait and see with people who already did it last night.  

My guess is that you probably want to keep the card that is the oldest.  Regardless, your AAOA will be affected, is just a matter of which card or cards you close (oldest or newest).  Scores? im not sure but it makes sense that they will take a dive? depending on how many cards you close?

Anyone?

[takeshi74]

---

@Anonymous wrote:

Regardless, your AAOA will be affected

---

Incorrect.  Read the link provided above.

[GoldSorata]

---

@Anonymous wrote:

Agree!

I guess we'll just have to wait and see with people who already did it last night.  

My guess is that you probably want to keep the card that is the oldest.  Regardless, your AAOA will be affected, is just a matter of which card or cards you close (oldest or newest).  Scores? im not sure but it makes sense that they will take a dive? depending on how many cards you close?

Anyone?

---

AAoA takes into account both open and closed credit lines. Closed accounts can stay on your reports for at least 10 years.

Edit: The link that takeshi74 provides explains it all.

[Creditwiser]

---

@takeshi74 wrote:

It all depends on what one's goals and priorities are.  Consider the info in this thread linked in the Helpful Threads sticky:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/m-p/347190?jump=true

If one has a card that is of no use and one is looking to close it then transferring the available credit to a useful card that will be kept open would eliminate or at least partially mitigate any impact to utilization. 

---

Not the case for me . I use both cards regularly. I kind of bounce between them to keep the UTL as low as pissible even though I PIF.  You're right though, definitely makes sense if you were thinking about closing one. I noticed a few people wishing they hadnt done that with their Cap 1 card now that they learned they could have combined the limits.

[Anonymous]

Also, higher limits beget higher limits. 

If you apply for a card and have a $3k limit and a $4k limit on two existing cards I believe I've seen that you'd get a lower limit than you would with one $7k card. 

So again, it depends what your goals/needs are. 

ETA: Also simpler, one bill to worry about, one payment and statement date to worry about. 

[Creditwiser]

---

@Anonymous wrote:

Also, higher limits beget higher limits. 

If you apply for a card and have a $3k limit and a $4k limit on two existing cards I believe I've seen that you'd get a lower limit than you would with one $7k card. 

So again, it depends what your goals/needs are. 

ETA: Also simpler, one bill to worry about, one payment and statement date to worry about. 

---

Good points !

[Sharingan]

Although I can see how combining and consolidating limits could be useful, it's a convenience that I am very wary about using. Granted, lenders do consider your overall exposure limit with them; however, there are some that do still consider your cards with them on an individual basis. If they feel that you cannot manage a 30-50k card limit when the rest of your cards are around 1-10k, there's a chance that they may bring you back down to a level they are comfortable with. I'm sure this scenario also applies to those with much smaller credit limits as well.

I would never consider consolidating all of my Chase cards onto 1 because that single credit limit would greatly exceed that of any other card in my portfolio. Another example would be AmEx. They appear to be comfortable with a member having multiple 25k limits, but once you go over that on a single card, they get a little more apprehensive without supporting documents.

I'd be very curious to see how Capital One handles this feature going forward. They offered it once before in the past and eventually ditched it.

[yfan]

---

@Creditwiser wrote:

So now that the cats out of the bag and the Cap One combining cards thread has blown up, I'm curious to learn exactly how this benefits anyone interested in combining cards/limits.  Certainly for some with a much lower APR on one card would benefit, but how does it benefit someone thats rebuilding.  I have two QS1 with 4k on one and 3.5k on another.  How would this affect my scores, my AAoA, etc if I closed one card and had a 7.5k limit on the other ?

---

Well, if you have 2 QS1s, aren't you paying an AF on each card? Combining would at least bring it down to only one AF.