To close my unused cards or not?

[NoMoreDebt]

So after filing bk7 in 2015 we didn't see the advice given here to get certain cards right after and start building back up. It was 2020 before we ever got another credit card even though by this time post bk7 we had 4 auto loans ( 2 at a time at different times) and a Mortgage in 2019.

Beyond my paypal line of credit which i had back before they even started reporting to the bureaus. FNBO jeep card was our first credit card in 2020 quickly followed by the FNBO Ford pass visa then cap 1 quicksilver and apple card, a wells fargo active cash (PC'd from the propel we had) its redundant in the 2% space and we don't even bank them anymore and also a $1500 card through a local credit union that we also don't bank anymore.

Since then as our situation has improved we have got what I feel for us are our keeper cards as you see in my sig line. After getting back in with Amex after iib in the bk7 we have expanded with them and also got two great cards from NFCU with great limits also. This has caused us to migrate away from using the first cards that we got as we have better options for how we spend.  I haven't used the paypal LOC in 3 years or more and they still keep it open which is a good thing. I probably wouldn't voluntarily close it.

We are eyeing moving again in around 2 years to property as by then the bk7 will be off all our reports not just TU where I got an early exclusion and hopefully the market is a little better that it now interest rate wise. It seems hard to swallow an 8% mortgage when we are currently at 4%. 

Anyway for those wiser than me, considering we don't see much utility in using those cards now that we have better options and trying to be proactive for a possible move and maybe being told by a loan officer we would have to close some cards anyway would it hurt much to just close them out? Also for a DP we don't carry balances. On the charge cards and the Business Amex we let the statement cut then pay in full and I generally pay the others in full just before the statement cuts.

[JoeRockhead]

I guess you need to consider what shedding $28k+ off your TCL is going to do as well as the effects on your AAoA... 

Being you don't carry balances the TCL loss would be less painful than the reduction in you AAoA... but then there's the two years until another mortgage so... for me it's a complete toss up.

I suppose if I wanted to shed unused cards so I could replace them with better cards I'd let them go... but then again, is it hurting you, or really going to hurt you in the future to keep them open with no balancs, likely not.

[NoMoreDebt]

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@JoeRockhead wrote:

I guess you need to consider what shedding $28k+ off your TCL is going to do as well as the effects on your AAoA... 

Being you don't carry balances the TCL loss would be less painful than the reduction in you AAoA... but then there's the two years until another mortgage so... for me it's a complete toss up.

I suppose if I wanted to shed unused cards so I could replace them with better cards I'd let them go... but then again, is it hurting you, or really going to hurt you in the future to keep them open with no balancs, likely not.

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All very good points. Thank you. I really don't have aspirations for many more cards either. I would eventually add the AMEX CS Platinum for the ability to move our points to our brokerage and the Blue Cash Preferred and just keep building the relations for lack of other words with the good cards we are consistently using everyday. was also thinking or hoping that the growth through cli's on the keepers would offset the loss of TCL of the cards being tossed as they also seem less willing to grow?

Just trying to make sure im looking at this objectively and not thinking something foolish. Also just wasn't sure if it would create a situation where a LO would ask or force us to close cards when that time came especially if they aren't being utilized.

[Thomas_Thumb]

Having the sock drawer cards should not negatively impact a mortgage evaluation. That being said, I would get rid of cards (except one AMEX) with annual fees. I'd also get rid of lower CL cards - say any with a $5k limit or less just to simplify your portfolio. Probably close the Paypal ploc as well.

AMEX charge cards are 1 month PIF terms so, if you charge a lot on them during a mortgage review and it posts as a statement balance, it could hurt your dti calculation.

[FireMedic1]

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@JoeRockhead wrote:

I guess you need to consider what shedding $28k+ off your TCL is going to do as well as the effects on your AAoA... 

Being you don't carry balances the TCL loss would be less painful than the reduction in you AAoA... but then there's the two years until another mortgage so... for me it's a complete toss up.

I suppose if I wanted to shed unused cards so I could replace them with better cards I'd let them go... but then again, is it hurting you, or really going to hurt you in the future to keep them open with no balancs, likely not.

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@JoeRockheadOpen and closed cards all count for your AAoA's with FICO. Until a closed account falls off anywhere up to 10 yrs +/-. Then it will drop. Vantage drops your AAoA's with closed cards.

[JoeRockhead]

@FireMedic1 you see what happens when you're not a coffee drinker and been up since 3:30am and out making comments... I know better than that and it completely went poof from my brain.... sorry about that @NoMoreDebt !

[NoMoreDebt]

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@JoeRockhead wrote:

@FireMedic1 you see what happens when you're not a coffee drinker and been up since 3:30am and out making comments... I know better than that and it completely went poof from my brain.... sorry about that @NoMoreDebt !

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@JoeRockhead Gotta have that coffee. Don't worry I was currently drinking mine and still was having making sure and proof read what i was typing to make sure it was halfway coherent lol

[FireMedic1]

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@JoeRockhead wrote:

@FireMedic1 you see what happens when you're not a coffee drinker and been up since 3:30am and out making comments... I know better than that and it completely went poof from my brain.... sorry about that @NoMoreDebt !

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@JoeRockheadWe've all had brain farts before.

[Aim_High]

We all have to face these types of quandaries, @NoMoreDebt, and there isn't a single right answer.  Here are some considerations I wanted to point out.

• Closing accounts is a factor for aggregate utilization effects.  In your case, this is N/A since you have more than adequate credit lines and don't carry a balance.

• Closing accounts can affect AAoA (after they drop off your reports, as noted above.)  In (most) cases, that is +/- ten years but there's no guarantees or rules about it.  I've had them drop off sooner, so I recommend what would happen to AAoA if they did drop off quickly.  In your case, though, it sounds like all your accounts are three or less years, so the effect is negligible regardless.

• I recommend closing accounts with annual fees that aren't being recouped by added value such as credits.  I'm assuming the sock drawered cards don't have AFs and that your AF cards like your Green and Gold cards pull their weight in value for you.   So it appears that fees aren't a consideration.
• Speculating about an underwriting asking for cards to be closed is an unnecessary diversion.  I doubt it would happen.  If it did, close them then.  Closing accounts due to fear to having excessive credit is often unfounded. 
• Once you get past all the above, we get into the nuances of the value of rewards, lender diversity, and hassle to manage/monitor the accounts.    We all have our preferences on the number of cards we choose to maintain/manage.  I do notice that your lender diversity for the number of cards you carry is limited.  Assuming you closed all your sockdrawer cards, AMEX would get a LOT of emphasis with 5 cards out of 8 total, or 62.5% of your lineup.  That's far more than I would trust with a single lender.  NFCU gets 2 and USBank/Elan gets 1 of the remaining three.  Some of those other cards would be easy to shed for the low CL and/or focused rewards (PayPal Credit $1700; CU Rewards $1500; FNBO Ford $1000; and even the FNBO Jeep $7700.) 
• To me, Apple card is easy to keep since it has the potential to earn between an average of over 2% to up to 3% uncapped, depending on where you use it.  Monitoring is easy though iPhone and you can access the credit limit without having to carry the card or even add it to mobile wallet.  The CL is decent at $6200.  I would keep it; use it at least periodically; and try to grow it since it will grow easily with soft pulls.  Even with light to moderate usage, you could end up with a $15K to $25K credit limit with no additional new accounts or hard pulls.  Personally, I appreciate some of the advanced security features of the Apple card such as no visible card number on the card and the ability for Goldman Sachs to randomly change your security code.
• Capital One Quicksilver ... eeeh.  I could go either way.  The CL isn't spectacular at $3K and neither are the rewards at 1.5%.  I like Capital One and they offer some other good value such as BT offers and such.  But I could see the rationale for closing.
• Wells Fargo Active Cash is another solid card and CL is pretty good at $8200.  If you flip-flopped using this one with the Fidelity, you could probably grow it further over time with soft pulls and it helps with the lender diversity.  I would keep it. 
• There's no real hurry to close any of these cards.  You could just leave them sock-drawered and allowed nature to take its course by auto-closure.

Regardless of how you end up, I would consider how much of your credit is placed with any single lender.  

[NoMoreDebt]

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@Aim_High wrote:

We all have to face these types of quandaries, @NoMoreDebt, and there isn't a single right answer.  Here are some considerations I wanted to point out.

• Closing accounts is a factor for aggregate utilization effects.  In your case, this is N/A since you have more than adequate credit lines and don't carry a balance.

• Closing accounts can affect AAoA (after they drop off your reports, as noted above.)  In (most) cases, that is +/- ten years but there's no guarantees or rules about it.  I've had them drop off sooner, so I recommend what would happen to AAoA if they did drop off quickly.  In your case, though, it sounds like all your accounts are three or less years, so the effect is negligible regardless.

• I recommend closing accounts with annual fees that aren't being recouped by added value such as credits.  I'm assuming the sock drawered cards don't have AFs and that your AF cards like your Green and Gold cards pull their weight in value for you.   So it appears that fees aren't a consideration.
• Speculating about an underwriting asking for cards to be closed is an unnecessary diversion.  I doubt it would happen.  If it did, close them then.  Closing accounts due to fear to having excessive credit is often unfounded. 
• Once you get past all the above, we get into the nuances of the value of rewards, lender diversity, and hassle to manage/monitor the accounts.    We all have our preferences on the number of cards we choose to maintain/manage.  I do notice that your lender diversity for the number of cards you carry is limited.  Assuming you closed all your sockdrawer cards, AMEX would get a LOT of emphasis with 5 cards out of 8 total, or 62.5% of your lineup.  That's far more than I would trust with a single lender.  NFCU gets 2 and USBank/Elan gets 1 of the remaining three.  Some of those other cards would be easy to shed for the low CL and/or focused rewards (PayPal Credit $1700; CU Rewards $1500; FNBO Ford $1000; and even the FNBO Jeep $7700.) 
• To me, Apple card is easy to keep since it has the potential to earn between an average of over 2% to up to 3% uncapped, depending on where you use it.  Monitoring is easy though iPhone and you can access the credit limit without having to carry the card or even add it to mobile wallet.  The CL is decent at $6200.  I would keep it; use it at least periodically; and try to grow it since it will grow easily with soft pulls.  Even with light to moderate usage, you could end up with a $15K to $25K credit limit with no additional new accounts or hard pulls.  Personally, I appreciate some of the advanced security features of the Apple card such as no visible card number on the card and the ability for Goldman Sachs to randomly change your security code.
• Capital One Quicksilver ... eeeh.  I could go either way.  The CL isn't spectacular at $3K and neither are the rewards at 1.5%.  I like Capital One and they offer some other good value such as BT offers and such.  But I could see the rationale for closing.
• Wells Fargo Active Cash is another solid card and CL is pretty good at $8200.  If you flip-flopped using this one with the Fidelity, you could probably grow it further over time with soft pulls and it helps with the lender diversity.  I would keep it. 
• There's no real hurry to close any of these cards.  You could just leave them sock-drawered and allowed nature to take its course by auto-closure.

Regardless of how you end up, I would consider how much of your credit is placed with any single lender.  

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Thank you for the thinking points. Definitely gives me another way to look at it especially with the lender diversity. I do tend to get loyal such as in the case with AMEX and that could be detriment.