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Should I close my retail cards?

New Contributor

Should I close my retail cards?

How many retail cards are too many before it starts to negatively impact your credit. I have 19 retail store cards. I used many of them to help rebuild my credit and now I don't event use them.  All are reporting a $0 balance.  The only that get occasional use are Ulta, Target, and Sam's Club.  The oldest card is about 2 years old.  Should I close out the ones I rarely use?

 

Victoria Secret

Boscov's

JCrew

Ulta

Torrid

Target

Nordstrom

Ann Taylor

Piercing Pagoda

Express

Lane Bryant

Brooks Brothers

HSN

Ikea Project Card

Sam's Club

New York & Company

Lowes

Pottery Barn

Arhaus Furniture

 

Equifax 656

Transunion 659

Experian 645

Equifax: 656
Experian:645
Transunion:659
Message 1 of 16
15 REPLIES 15
Super Contributor

Re: Should I close my retail cards?


@orky626 wrote:

How many retail cards are too many before it starts to negatively impact your credit. I have 19 retail store cards. I used many of them to help rebuild my credit and now I don't event use them.  All are reporting a $0 balance.  The only that get occasional use are Ulta, Target, and Sam's Club.  The oldest card is about 2 years old.  Should I close out the ones I rarely use?

 

Victoria Secret

Boscov's

JCrew

Ulta

Torrid

Target

Nordstrom

Ann Taylor

Piercing Pagoda

Express

Lane Bryant

Brooks Brothers

HSN

Ikea Project Card

Sam's Club

New York & Company

Lowes

Pottery Barn

Arhaus Furniture

 

Equifax 656

Transunion 659

Experian 645


@orky626 well they'll still be on your report for up to 10 years even if you do close them, but I don't know how many other cards/revolvers you have, but the TransUnion Mortgage Score penalizes a little heavily for too many revolvers, which would include these retail accounts, so if you're not using them and you have other national bankcards, then you might want to close some of them you're not using. 

to be honest I'd probably close all of them I'm don't use, unless it's going to adversely affect your utilization.

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 2 of 16
Super Contributor

Re: Should I close my retail cards?

You don’t wanna do it all at once though but overtime just close two or three at a time.

 

And if any of them are your oldest you may want to think about Keeping those

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 3 of 16
Valued Contributor

Re: Should I close my retail cards?


@orky626 wrote:

How many retail cards are too many before it starts to negatively impact your credit. I have 19 retail store cards. I used many of them to help rebuild my credit and now I don't event use them ...  Should I close out the ones I rarely use?


That's a heckuva lot of retail cards, @orky626.   In a nutshell, yes it sounds like you should probably close most of them and @Birdman7  gave you some great advice.  

 

It's worthwhile defining the difference in co-branded retail cards versus true store cards.  They are not the same thing but many people think of them in the same group.  Cobranded cards may have a store name on them but they are also part of a major processing network like Mastercard or Visa or American Express.  They can be used outside the store as well as in the store. (Cobrands also include travel cards like the cooperative agreements banks have with airlines and hotel chains.) True STORE cards are only capable of being used in that store.  Some stores offer both a retail store card AND a cobranded card.  For example, Macy's has both.  Doesn't Sam's Club offer both a store card as well as a Mastercard version?  In my opinion, cobranded cards are possibly much more valuable that store cards because of the flexibility they offer. 

 

How many non-retail card do you have, though, and what is the percentage of your overall lineup that is in retail cards?  I think most of our seasoned members will recommend that you are judicious about which store cards you add to or keep in your profile and that they are a fairly limited number of your overall  cards, especially as your profile matures. 

 

Store cards can be helpful for building a profile in moderation.  They tend to be easier to qualify for in many cases with limited credit history.  For someone who shops at certain stores frequently without having to think about, they can be a good choice with the additional savings that are sometimes offered on these cards. 

 

In my case, I chose to divest myself of them entirely in favor or just major bank cards.  In my opinion, retail cards just added unnecessary complexity to managing my finances.  The limits on these cards is often much smaller than major bank cards so it's easier to overload utilization rates.  Toy limits are not uncommon.  APRs and fees are usually much higher than major network bank cards.  From my experience, lenders are much more quick to close them without use than they will a major nonretail bankcard.  Sometimes this happens without notice.  I got tired of authorizing a new account and hard pull to open a new card (usually after being offered a few dollar's savings at the cash register) only to find it closed when I remembered to pull it out of my desk to use it.   Grrrr ....  Smiley Mad  On the other hand if I choose to carry them so I remember to use them more often, they're taking up valuable space in my wallet.  The overall hassles were not worth it to me for the rewards I got. 

 

If I had a major purchase and wanted to take advantage of special financing, I might consider opening another one specifically for that purchase.  But then I would close it when it's paid off.  The last retail card I opened was to buy a large amount of furniture as I relocated to a new house. 

 

Keeping some that you use a lot organically is fine.  Just make sure they are a limited percentage of your cards, maybe no more than 25% would be my personal suggestion.




As of 01/11/21

Total Length of Credit > 35 years; AoOA (Currently open accounts) > 27 years
AAoA > 7 years; AoYA less than 1 year (Aug 2020)
Credit Limits: Total > $573K. Average > $28K. Utilization 1%.
Total Inquiries (TU:3 ~ EQ:4 ~ EX:7); Scorable Inquiries (TU:1 ~ EQ:2 ~ EX:4)
New Accounts: 1/6 months; 4/12 months; 11/24 months (as of 01/11/21)
* Hover cursor over each card to see name & CL, or press & hold on mobile app.
** Gardening since 08/15/20. Garden Goal: Gold Spade on 02/15/21
Message 4 of 16
New Contributor

Re: Should I close my retail cards?

@Birdman7 @Aim_High  Thanks for your taking the time to respond.  I appreciate the feedback.  I don't have any national bank cards as my scores are not that great and had I have a few declines from NFCU, Chase, and BofA.  

 

I will consider closing some gradually because it does get overwhelming just looking at these cards in my drawer.

 

Equifax: 656
Experian:645
Transunion:659
Message 5 of 16
Frequent Contributor

Re: Should I close my retail cards?

@orky626 Sorry to hear about your decline especially from Navy. Chase and BOA have higher credit score requirements.

 

What is your Average age of accounts? When did you apply for a Navy card? What card did you apply for? What reasons were listed for denial? Final question, did you try for the secured card?

Message 6 of 16
Super Contributor

Re: Should I close my retail cards?

Considering your lack of national bankcards, you do want to keep some of these to show positive payment history until such time as you can get national bankcards and as stated, if it’s one that you use and benefit from there’s nothing wrong with keeping it, but as you mature your profile, you definitely want to adopt national bankcards, which do include cobranded cards as explained eloquently above.

I recommend that you read the Scoring Primer linked at the top of my signature and in post 7 investigate the secured bankcard thread. Despite your scores it may very well get approved for a secured card and credit unions are good ideas as well.

You may want to investigate the SSL technique, and you may need to let some time pass from your inquiries depending on when they were, And time pass from your youngest account being opened.
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. Highest from under 5%>48%, Accts: 1/21>10/21, $6,137. Dec 2020, (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 7 of 16
Regular Contributor

Re: Should I close my retail cards?

This is such great information @Aim_High . I too experienced having store cards closed for non-activity with zero notice.  If these companies can send written notification to the CRA, then certainly a courtesy " your account is currently dormant " will do--Kay Jewelers/Sterling, Express ( which was so unnecessary). 

Message 8 of 16
Mega Contributor

Re: Should I close my retail cards?


@Aim_High wrote:

 

Store cards can be helpful for building a profile in moderation.  They tend to be easier to qualify for in many cases with limited credit history.  For someone who shops at certain stores frequently without having to think about, they can be a good choice with the additional savings that are sometimes offered on these cards. 

 

In my case, I chose to divest myself of them entirely in favor or just major bank cards.  In my opinion, retail cards just added unnecessary complexity to managing my finances.  The limits on these cards is often much smaller than major bank cards so it's easier to overload utilization rates.  Toy limits are not uncommon.  APRs and fees are usually much higher than major network bank cards.  From my experience, lenders are much more quick to close them without use than they will a major nonretail bankcard.  Sometimes this happens without notice.  I got tired of authorizing a new account and hard pull to open a new card (usually after being offered a few dollar's savings at the cash register) only to find it closed when I remembered to pull it out of my desk to use it.   Grrrr ....  Smiley Mad  On the other hand if I choose to carry them so I remember to use them more often, they're taking up valuable space in my wallet.  The overall hassles were not worth it to me for the rewards I got. 

 

 


I think the bolded part is key.   I am less sure that there is a huge difference between store and bank cards.   Yes, co-branded bank cards CAN be used outside the store, but generally you wouldn't want to as the rewards will be poor.       And if you don't shop at the co-brand much, there isn't a  lot of point in getting a cobrand bank card.    A good example is Amazon.   If you shop a lot at Amazon (but not at WholeFoods) either the Chase card (bank) or Sync (store) could be great.   If you are not an Amazon user, should probably steer clear of both.

 

So, IMO, at least from the rewards perspective, get cards that reward you at the places you spend most, be it store or bank.   And sure, the cards may nerf or your needs may change, but that's true to some extent of both.   If you totally stop shopping at store X, the store card becomes useless whereas in theory the cobrand X bank card would still be usable, but again, probably don't want to.

Message 9 of 16
Valued Contributor

Re: Should I close my retail cards?


@longtimelurker wrote:

@Aim_High wrote:

Store cards can be helpful for building a profile in moderation.  They tend to be easier to qualify for in many cases with limited credit history.  For someone who shops at certain stores frequently without having to think about, they can be a good choice with the additional savings that are sometimes offered on these cards. 


I think the bolded part is key.   I am less sure that there is a huge difference between store and bank cards.   Yes, co-branded bank cards CAN be used outside the store, but generally you wouldn't want to as the rewards will be poor.       And if you don't shop at the co-brand much, there isn't a  lot of point in getting a cobrand bank card.    ... So, IMO, at least from the rewards perspective, get cards that reward you at the places you spend most, be it store or bank.   And sure, the cards may nerf or your needs may change, but that's true to some extent of both.   If you totally stop shopping at store X, the store card becomes useless whereas in theory the cobrand X bank card would still be usable, but again, probably don't want to.


I think you misunderstood my point, @longtimelurker.  I wasn't suggesting someone apply for either cobranded or store cards that weren't useful in the framework of their spending and other credit options.  @orky626 was talking about "thinning the herd" of 19 retail cards and I was trying to make the point that cobranded cards that could be used outside the store are more useful and versatile, so therefore might be more worthy of longer retention when choosing among those cards.   The later posting revealed that OP doesn't have ANY major bankcards, so even a single mastercard or visa from a retail store that could be used elsewhere is probably a valuable commodity in the context of that setup. 

 

Sure, for those of us who have longer credit histories and choices, the rewards on using cobranded cards elsewhere might be of questionable value.  I once had a Dillard's department store card that was on the AMEX network and could accrue Dillard's points on my overall spending where AMEX was accepted.  I chose not to do so, but for someone who shops a lot at a store like Dillard's, they may not care that they could get more value from other cards if their focus is on store points.  It's a similar situation I see where people get hotel or airline cards and use them to save points for travel, even if the cards are accruing points at a lower value than other card options on the market. 

 

And we sometimes forget that everyone on My Fico is not focused on maximizing their rewards.  Some like a more simple approach with only a few cards.  In OP's case, the choice might be either having a cobranded card that can used outside the store or having no credit card that can used outside the store.  In the context, the cobranded card becomes much more valuable than it would for those of us with more options. 




As of 01/11/21

Total Length of Credit > 35 years; AoOA (Currently open accounts) > 27 years
AAoA > 7 years; AoYA less than 1 year (Aug 2020)
Credit Limits: Total > $573K. Average > $28K. Utilization 1%.
Total Inquiries (TU:3 ~ EQ:4 ~ EX:7); Scorable Inquiries (TU:1 ~ EQ:2 ~ EX:4)
New Accounts: 1/6 months; 4/12 months; 11/24 months (as of 01/11/21)
* Hover cursor over each card to see name & CL, or press & hold on mobile app.
** Gardening since 08/15/20. Garden Goal: Gold Spade on 02/15/21
Message 10 of 16
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