To cancel low limit cards?

[Anonymous]

Hello all, 

I wanted to reach out and ask your opinions on whether or not to cancel old credit cards that I don't actually use or not. My current line up is as follows: 

capital one qs - $300

capital one qs1 - 600

chase freedom - 1500

chase freedom unlimited - 1000

amex delta gold - 2000 

AMEX everyday - 1000 

ashley card - 2500

care credit - 1850 

cefcu - 500

i usually pif each month and only have 450 outstanding balances (promo on a couch I bought) I want to transfer cl from my qs1 to qs however my qs was a former platinum with 1 30 and 1 60 day late at 3 years old and my qs1 has 2 years perfect pay history. I also have only had the cefcu for 4ish months and am thinking of canceling it. So I don't know if I want to lose my accounts reporting positive trade lines and most of those accounts were opened in the last year with an AAoA at 2.8 years. I was wondering if it would hurt or help to close the cefcu and combine the cap one cards? Current scores (checked now) ex 678eq 632 and tu 698. Thanks! 

[dragontears]

1. I don't think cap1 is allowing card combinations right now 

2. Why did you open the CU card in the first place? Has the reason you wanted the card changed (life changes so does what cards best suits an individual). Do you know what this CU's requirements are for getting a CLI?

Personally I don't close cards that are that young, 4 months is a blink of an eye in credit world 

[Anonymous]

Thank you for your response and I agree I just thought since it is so new closing may have mild impact. Honestly I only got it to grow my base of credit cards before getting my chase freedom and freedom unlimited cards (came before Amex). This one does not have any rewards resulting in me never using it. Before I saw a huge increase in my score it was the only card I could get outside of my two cap one cards. Also I did not know they did not do that! Interesting I always thought they did. I will definitely keep those two open then as they're my longer cards being open. I have only made one 20 dollar purchase on the cefcu card since I run about 2,500-3,000 a month through credit cards I think I will maybe put a couple hundred of that into my cefcu card and ask for a cli in a couple months (maybe a product change with it) and see what happens. I typically just use my Capone cards with auto bills like Hulu and Netflix in low amounts and put big spend through the chase cards and Amex cards. I can shift things around and maybe try to get that one a cli. Thanks! 

[rafy023]

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@Anonymous wrote:

Hello all, 

I wanted to reach out and ask your opinions on whether or not to cancel old credit cards that I don't actually use or not. My current line up is as follows: 

capital one qs - $300

capital one qs1 - 600

chase freedom - 1500

chase freedom unlimited - 1000

amex delta gold - 2000 

AMEX everyday - 1000 

ashley card - 2500

care credit - 1850 

cefcu - 500

i usually pif each month and only have 450 outstanding balances (promo on a couch I bought) I want to transfer cl from my qs1 to qs however my qs was a former platinum with 1 30 and 1 60 day late at 3 years old and my qs1 has 2 years perfect pay history. I also have only had the cefcu for 4ish months and am thinking of canceling it. So I don't know if I want to lose my accounts reporting positive trade lines and most of those accounts were opened in the last year with an AAoA at 2.8 years. I was wondering if it would hurt or help to close the cefcu and combine the cap one cards? Current scores (checked now) ex 678eq 632 and tu 698. Thanks! 

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I don't think the Capital One cards will grow too much. It just seems if they start you out low in many cases you will remain there or they will grow your line very slowly and newer cards will have much higher limits - depending on what your long-term strategy is you may want to drop those at some point in the future when your profile gets a little thicker and either apply for new Capital One cards or for something else. I personally don't think closing out one of your younger cards (the CEFCU) will hurt you that much, especially since it is not a a very big CL compared to your other cards but you will want to be more careful with what you apply for so you don't end up in the same situation with having to close a card you just got (It happens, i'm considering closing out my most recent card too because I wasn't diligent enough in my research). 

Good luck

[Brian_Earl_Spilner]

Closed accounts will continue to contribute to FICO score a for up to 10 years. They are factored out in VantageScore.

[pinkandgrey]

I would (and I have) just close any cards you don't want or use. Many people will tell you to keep them open for the utilization padding, or to keep your oldest card open. If you want to do it that way, go ahead. For me, I prefer simplicity so I close anything I don't want, regardless of the age of the account. 

Good luck with whatever you decide! 

[Remedios]

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@Brian_Earl_Spilner wrote:

Closed accounts will continue to contribute to FICO score a for up to 10 years. They are factored out in VantageScore.

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Vantage scores use closed accounts in AAoA calculation. CK user interface doesnt, so that's what many trip on. 

[Curious_George2]

I have a question about a different aspect of this issue.  I learned here on MF that card issuers peek at an applicant's existing limits when evaluating how much of an SL to give.  Depending on the details of how they do that, it seems possible that closing low-CL accounts could help nudge future SLs higher. 

In case it's not obvious what I mean, imagine two people, A and B.  Other than CLs, let's assume they have identical credit reports.  Their CLs on open cards are as follows:

A: $15k, $10k, $5k, $1k, $500

B: $15k, $10k, $5k

A's average CL on open tradelines is $6,300.  B's is $10,000.  If A and B apply for the same new card, do we know if B's higher average open CL (AOCL?) will tend to cause B to get a higher SL?

[CJ7]

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@Curious_George2 wrote:

... I learned here on MF that card issuers peek at an applicant's existing limits when evaluating how much of an SL to give. 

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This is true in my personal experience.  Every creditor evaluates it differently - while some go for a median

limit, others will attempt to match or outdo your highest limit for a major.  A $35,000 Lowes won't factor in.

Once you are able to obtain a 5-figure limit, doors tend to open up.

Personally I tend to ditch low-limit cards unless they serve some specific purpose.

[Anonymous]

Thank you for your responses! I am keeping the cap one cards because the QS is 3.5 years old and the qs1 is 1 year 8 months which are my two longest opened credit cards. The CEFCU card was a promo I received for a pretty decent travel card but they approved me for a mastercard with no rewards rate and low limit with the promise of reviewing in 6 months to upgrade and give a higher limit (for two hps). The problem is I only charged 10 bucks on it once in 5 months because it very convenient to pay since I believe the only way to pay is through my chase checking bill pay account which makes it hard to use because of the cl and the functionality of the card itself.