To Close or Not to Close?

[AllCredit]

Like many, I'm a long time lurker...finally decided a few weeks ago to get into the game.

Anywho,  I've been considering for awhile now whether to close some cards (mostly store cards) and thought I would get opinons from seasoned vets on the matter.

30sec elevator spiel:

Was rebuilding after really (not) smart decisions in my early-ish 20s (I'm who needs credit right?!)...in chronological order:

(2012-2014)

5/3 Secured $500

Comenity Bank $4000

Care Credit $3500 (they dropped me down to $3000)

Dillards $500

Kays $5000 (auto CLI'd to $7600)

Bought a home in 2014

Lowes Card $300 (recently CLI'd to $12000)

Floor & Decor $2000 (auto CLI'd to $4000)

HHgregg $2500

Kanes $1600 (I closed 10/16)

Bought car in 2015

Then finally the 3 and 4th quater of 2016 happened:

PenFed Personal Loan $13500

Velocity FCU - Refi auto loan

Discover It $5400 (still waiting on my 90 to end)

In Feb. went on an app spree (I am done...I promise...it was just the high I felt of getting approved after feeling unworthy for so long took over just a bit):

BCE $1000

Delta Gold $2000

PenFed Power $5000

PenFed Promise $4500

Amazon Prime Visa $5000

I'd like to strategically get rid of some or most of the store cards, I'd really like to get rid of the secured card but it is my oldest credit card account at the moment not sure I should do it but on one of the simulators it didn't show a drop by getting rid of it...

Other fun facts:

I have a charge off (NFCU) dropping off in May or June (do they blacklist?)

I have two paid collections that show up on Experian only

AAoA 2.8yrs

Fico 8 700

Utilization 6% (Amex and Amazon Cards not report yet so not included)

No balances on the store cards except for roughly $400 on Care Credit

(So much for 30sec...sorry)...any wisdom that one wants to bestow upon me is greatly appreicated...and I'm sure somehow I left something out...

Last but not least...this forum and the people in it are awesome...where have you all been all my life?!

[Anonymous]

I'd keep the high limit ones if you are carrying balances on other cards so your utilization doesn't go up too much so you'll have better successes in building those new cards for CLI's.  As you build them up high then you can start cleaning house.  I'd close the little ones.

[AllCredit]

Thank you...so I went ahead an closed my HHgregg acct for $2500, was thinking about also closing the Comenity that is at $4K, think that will be okay.  I only have one store card with a balance which is Care Credit.

[Anonymous]

I closed all my store cards (except Amazon) at once and never took a hit at all - but I don't have any Utilization which is really the only reason to keep them open-if they are helping your Utilization.

Keep Caden credit till it is paid off if you can't pay it now. Or BT the $400 ro a different card and close that as well.

[precision]

What is your strategy for closing the cards at all?

Why close them?  You already opened them and have them now.  The effect on your profile is done and will continue to be there for at least 10 years.

At this point closing them is going to hurt you.  By closing them you are reducing your total utility which will impact your FICO's. 

If you are truly no longer interested in using them just sock drawer them or cut them up.  There is literally no point in closing them.  Closing predatory lending cards like Credit One is imperative.  But those store cards while sub prime are not anywhere near the same class as First Premier or Merrick or etc...

Keep them around for the utility pad.  Just by closing that one card your  utility went up by 1%.  If you close enough where your utility goes past 10 percent you will see a definite FICO reduction.

[Anonymous]

AAOA is the same for open or closed cards. Doesn't matter. The ONLY thing cards so when you keep them open versus closed is help your Utilization. Bad misconception around here. To me sock drawing cards is dumb so I guess we all have our opinions.

[minski]

For what it's worth, I am keeping my oldest credit card open because there is literally 10 years between that card and the next oldest open card. I may not see an effect now if I should close it but I may in 10 years when the closed account falls off my reports. However, if it were a case of maybe a few years difference, I myself would not be as concerned about closing it. I suppose it would be up to you to decide whether you feel comfortable closing the secured card.

[Anonymous]

AllCredit your view of store cards certainly works (great credit builders or re-builders but limited beyond that). Might look at the HHGregg as they are heading to BK11 if I remember and the financial markets predict their demise. Comenity Bank is always a crap shoot so a card to think about. Others will post too. Food for thought.

[NRB525]

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@precision wrote:

What is your strategy for closing the cards at all?

Why close them?  You already opened them and have them now.  The effect on your profile is done and will continue to be there for at least 10 years.

At this point closing them is going to hurt you.  By closing them you are reducing your total utility which will impact your FICO's. 

If you are truly no longer interested in using them just sock drawer them or cut them up.  There is literally no point in closing them.  Closing predatory lending cards like Credit One is imperative.  But those store cards while sub prime are not anywhere near the same class as First Premier or Merrick or etc...

Keep them around for the utility pad.  Just by closing that one card your  utility went up by 1%.  If you close enough where your utility goes past 10 percent you will see a definite FICO reduction.

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The OP has new limits from the new cards which are not reporting yet, will help utilization. One of the AMEX cards may be able to get a CLI in a few months to continue the growth of CL.

In general, I agree, if a card is opened, there's just a few situations where one wants to rush to close, Credit One is one of those situations. With store cards, however, the usefulness of the card is limited and the open account is something that has to be monitored for risk management. Closing the account means one no longer has to watch for issues on that card, is not tempted to buy something just to keep the card active. A card such as Lowes does give 5% at that store, so that is an example of a reason to think carefully before closing such a card.

And the advice to cut up an open card is just not good advice Once you close it, then destroy the card. While open, it is often necessary to be able to refer to the card when calling in to customer service, even to eventually close the card.

[AllCredit]

Thank you all for the advice!  I closed HHgregg, last week and will leave everything else along for now and may review on a quaterly basis, as CLI's on the major cards start to occur (figure I might as well be optimistic).  I do plan on using the Lowes card eventually...I live in FL and have an original a/c...that is WELL beyond its intended life span so I'm just waiting for the day I've got to make that new purchase...