Too many credit cards?

Anonymous · ‎11-06-2017

Over the past 2yrs or so, i have been applying for credit left and right with a pretty high approval rate. As of now, my credit report is littered with credit cards/accounts with limits ranging from $750 to $8000... 34 total. my oldest account is 10yrs old and my newest is about 3 1/2 months

I have some cards that I was thinking of eliminating with limits ranging from $750 to $1650... 8 total... would lower my total credit limits by about $8000.

aside from increasing my utilization, will closing these accounts have a major detrimental effect?

i am just wondering if i have too much credit and that I am nickel and diming my fico to death with this miniscule limits, mostly from store branded cards.

HeavenOhio · ‎11-06-2017

If you're closing cards you've acquired in the past two years, there won't be any harm to your account age stats, either now or in the future.

Unused store cards are a pain to manage. Get rid of them.

RadioRob · ‎11-06-2017

As you noted... utilization is the biggest factor. Some scoring models might place some credance to the average age of open accounts, but if it is... it won't be much.

Personally I don't think it helping or hurting you. If there is an AF or other cost involved in maintaining the account and you're not getting a strong value from it, I would personally get rid of it ASAP. For the other cards, chop until you have what you want/need.

It's truly a personal question... some will say keep it and sock drawer. That if it's not specifically hurting you to leave it. I personally believe it's not worth maintaining something that does not bring you value. Credit should work for you, not you having to work for credit.

Dalmus · ‎11-06-2017

As far as scoring goes, no, other than the total available credit decreasing, you won't see an effect on your FICO scores unless you are in the habit of carrying balances.

The tradelines, even when closed, will continue to show on your credit report for up to 10 years, so you don't need to worry about damaging your AAoA, either.

On a personal note, going forward after you've pruned, concentrate on growing what you have before you apply for more. If you don't need the card you're thinking of applying for, trust me and a lot of other members, don't get it. Its hard (and most of us fell into that cycle, myself included!) not to love that feeling of being approved for yet another credit line... but when you have to maintain 32 accounts and check them monthly to make sure there's no fraud, or make sure you've made a purchase on each one at least once every 5-6 months and then make sure you've made the monthly payment (hopefully in full), it gets old, quick!

Current FICO 8 Scores: EQ: 828| TU: 805 | EX: 814

Anonymous · ‎11-06-2017

It is my understanding that the only thing that would hurt your score is closing old accounts and hurting your AAoA. However, if you have more cards than you are cofortable with and there are cards that you feel you don't need, I would definitely close them. As long as all the cards you close aren't also all of your oldest cards you'll be fine, plus closed accounts still show on your report for a while afterwards anyways.

Tl;dr Close those accounts if you don't want them or need them

Anonymous · ‎11-06-2017

Closing old accounts won't hurt AAoA. It might hurt your AoOA in 10+ years when the account falls off, if it was your oldest tradeline by many years.

simplynoir · ‎11-06-2017

@Anonymous wrote:
Closing old accounts won't hurt AAoA. It might hurt your AoOA in 10+ years when the account falls off, if it was your oldest tradeline by many years.

I would argue that even in 10 years time assuuming the other 20+ some odd cards are kept he'll be so far into the higher score bracket for AAoA it won't even matter if they do fall off after that time.

Anonymous · ‎11-06-2017

@simplynoir wrote:
@Anonymous wrote:
Closing old accounts won't hurt AAoA. It might hurt your AoOA in 10+ years when the account falls off, if it was your oldest tradeline by many years.
I would argue that even in 10 years time assuuming the other 20+ some odd cards are kept he'll be so far into the higher score bracket for AAoA it won't even matter if they do fall off after that time.

Yep, hence why I put in the "by many years" at the end there.

Example:

Card opened 7 years ago.
Other cards opened this year.
Oldest card closed and will fall off in 10 years -- at an age of 17 years for the oldest tradeline
Once it falls off, the other cards are only 10-11 years old, which is not the highest breakpoint for oldest tradeline
FICO score may drop until the next oldest card hits the next breakpoint

Is it likely? Probably not. Would take a pretty rare profile to really get punched by this, and it won't happen for 10 years anyway.

Still, I do projections on my credit going forward, including projecting my AAoA changes if cards are added (and when, if in the future) and what would happen if a particular card was closed today (or in the future). My projections go out 20 years (spreadsheet that's automated). My oldest card is 53 months, my second oldest card is 8 months. Closing my oldest account today means in 10 years I likely WOULD see a FICO drop from falling out of a possible 15 year old tradeline reporting.

longtimelurker · ‎11-06-2017

@Anonymous wrote:
@simplynoir wrote:
@Anonymous wrote:
Closing old accounts won't hurt AAoA. It might hurt your AoOA in 10+ years when the account falls off, if it was your oldest tradeline by many years.
I would argue that even in 10 years time assuuming the other 20+ some odd cards are kept he'll be so far into the higher score bracket for AAoA it won't even matter if they do fall off after that time.
Yep, hence why I put in the "by many years" at the end there.

Example:

Card opened 7 years ago.
Other cards opened this year.
Oldest card closed and will fall off in 10 years -- at an age of 17 years for the oldest tradeline
Once it falls off, the other cards are only 10-11 years old, which is not the highest breakpoint for oldest tradeline
FICO score may drop until the next oldest card hits the next breakpoint
Is it likely? Probably not. Would take a pretty rare profile to really get punched by this, and it won't happen for 10 years anyway.

Still, I do projections on my credit going forward, including projecting my AAoA changes if cards are added (and when, if in the future) and what would happen if a particular card was closed today (or in the future). My projections go out 20 years (spreadsheet that's automated). My oldest card is 53 months, my second oldest card is 8 months. Closing my oldest account today means in 10 years I likely WOULD see a FICO drop from falling out of a possible 15 year old tradeline reporting.

Yes, but going out that many years is assuming some sort of continuity of FICO algorithm , which may well be the case but might not. Closed inactive cards might count less towards AAoA, or data may show that AAoOA is the real predictor etc. That said, it's doubtful if any change will reward closed cards more!

Anonymous · ‎11-06-2017

@Dalmus wrote:
As far as scoring goes, no, other than the total available credit decreasing, you won't see an effect on your FICO scores unless you are in the habit of carrying balances.

The tradelines, even when closed, will continue to show on your credit report for up to 10 years, so you don't need to worry about damaging your AAoA, either.

On a personal note, going forward after you've pruned, concentrate on growing what you have before you apply for more. If you don't need the card you're thinking of applying for, trust me and a lot of other members, don't get it. Its hard (and most of us fell into that cycle, myself included!) not to love that feeling of being approved for yet another credit line... but when you have to maintain 32 accounts and check them monthly to make sure there's no fraud, or make sure you've made a purchase on each one at least once every 5-6 months and then make sure you've made the monthly payment (hopefully in full), it gets old, quick!

yeah, that's where I am at right now. I only cary balances on 6 cards (1.9% balance transfers and 0% promo for 12 months on purchases)... but i am constantly logging into several accounts that I am not using and don't plan too.