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Should I cancel some credit cards?

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Should I cancel some credit cards?

I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

 

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

 

Thanks!

 

Message 1 of 38
37 REPLIES 37
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Super Contributor

Re: Should I cancel some credit cards?


@RunningWithScissors wrote:

I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

 

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

 

Thanks!

 


Thats your answer



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>05/2020 CCT EX 834 TU 848 EQ 844

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Message 2 of 38
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Re: Should I cancel some credit cards?



Thats your answer


Not really. Is it the debt of my mortgages or the unused debt of the credit cards?

Message 3 of 38
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Established Contributor

Re: Should I cancel some credit cards?


@RunningWithScissors wrote:


Thats your answer


Not really. Is it the debt of my mortgages or the unused debt of the credit cards?


Unused credit is not a debt for DTI purposes.  

Message 4 of 38
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Senior Contributor

Re: Should I cancel some credit cards?

"Unused debt" by definiton cannot be used in a DTI ratio calculation so that's not the answer.  A credit line is not a debt, the actual debt occurs when there's a balance on the credit card.  Your credit application denials are most likely due to your current mortgage obligations and your maxed out HELOC.





Message 5 of 38
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Re: Should I cancel some credit cards?

OK, that's exactly the sort of answer I was looking for. Unfortunately it's not the one I wanted to hear... :-(

 

Message 6 of 38
Super Contributor

Re: Should I cancel some credit cards?


@RunningWithScissors wrote:

I have an excellent (800+) FICO score, and many credit cards I no longer use. I also have quite a few mortgages (almost all are for investment properties) plus a HELOC (almost maxed out), and find myself frequently being turned for new credit cards, even though I have a good salary (in addition to the rental income) and don't miss payments. I have no trouble paying my balances off every month - I never use revolving credit. When I am given a reason for refusal, it's usually because of my debt to income ratio.

 

Would closing some of the cards I no longer use be beneficial in any way? They are all no-fee cards; most are disused because I now have cards with better benefits.

 

Thanks!

 


You've been turned down for credit cards because of "debt to income ratio"? It's funny, I've been turned down many times but never saw that given as a reason. Are you sure those are the words?


Total revolving limits 646000 (570000 reporting) FICO 8 EQ 712 TU 739 EX 727

Message 7 of 38
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Valued Contributor

Re: Should I cancel some credit cards?

DTI denials tend to be CU based.

 

Big banks just say No you have too much credit already when you hit a percent of income like 50%-75% with that particular lender.

 

OP... who are you applying with?

500K+ TCL / 800+ FCOs
Message 8 of 38
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Super Contributor

Re: Should I cancel some credit cards?

If you have credit cards that you don't use, there's no harm in closing them down.  The only exception would be if they are non-AF cards that are either your oldest or one of your oldest accounts, as allowing it to continue to age would be a good thing for your file 10+ years from now relative to closing it/them today.  Anything else though, I'd just close it.

Message 9 of 38
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Valued Contributor

Re: Should I cancel some credit cards?

Per AJC

500K+ TCL / 800+ FCOs
Message 10 of 38
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