Which cards would you keep, and which would you get rid of?

[ChesterPDexter]

If anyone already read this in the general credit topics forum, please ignore this and please excuse me.  I forgot where all the action occurs on this forum, and I see now that many people are discussing the same issue, so I thought I'd post this again in case anyone else has additional thoughts for me (my husband doesn't post here but would love to know your opinion.)

My husband just borrowed enough money interest-free from a relative to pay off all of the following  This list shows ALL active cards on his credit report.  The only other thing is a car loan for just under $10K, in great standing, so as far as revolving debt, he owes nothing now.  It's a big day for him.  He actually paid them all off on Thursday.   Here is the list; remember, all are now zero balances.  Sorry that I don't have the opening dates but most are within the last 4-5 years or less, and in fact is AAofA is about 4.5 years even though his oldest account is 20 years or so. (that's a Macy's, and I didn't list a few old store cards almost never used.)  He's definitely keeping the USAA and the Gulf.  What would you cut from this list?  He's thinking of closing the Target and the fake Discover, especially if they won't raise the $750 limit.  Most of the accounts don't have annual fees so let's not factor that in; we're more interested to see what you think of the limits and rates and the type of card and potential for it to "grow."  The Target VISA, for example, seems like one better to leave in the dust, but that's just my guess.

USAA MC $5,000  16%  (all cards are listed with limit, APR, and the balance on all is zero)

USAA MC2  $2,000 17%

HSBC Dreamcard MC $1,900 20%

Barclaycard VISA $500 15%

Capital One MC $2,000 16%

Chase VISA $1,300 21%

GEMB Sam's store card $1,500 23%

GEMB Walmart store card $1,450 24%

PayPal MC $1,900 24%

GEMB Chevron $1,050 26%

HSBC Discover $750 19%

GEMB Amazon store card $900 26%

Target VISA $500 23%

NewEgg $2,400 24% or so

Dell $1,000 24% or so

Gulf Oil $500 (but we use this and PIF, so will not close; rate does not matter)

THANKS in advance for any suggestions or opinions!

[ChesterPDexter]

I was only trying to be complete, to preemptively answer questions. In case my text was too long to read comfortably, let me rephrase my question:

Which would you close?  All are paid off.  Refer to list.

THANKS!  

[Travis-84]

Even if a card is closed, it will be on your report for 10 years. Closing cards will not help the AAoA.

Two reasons I can see to close the cards:It might make it easeir to not rack up purchases on them again, and under manual underwriting, his credit limit will be lower, and he will be less of a risk. 

Keep the oldest card, keep the one with the best credit terms (probably USAA).  As for the rest, I don't think it maters too much if you keep it open or close them.

If it was me, I would probably keep about 3-4 open.  I just think its easier to manage.  I like to log in once a month, even on unactive accoutns, make sure the balance is still 0, and there is no unathurized account activity.  If you are comftorable with more accounts, and they give you rewards you can use (ie 5% off at target with target VISA), then leave more open.  The choice is really up to you. 

[kjm79]

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@Travis-84 wrote:

Even if a card is closed, it will be on your report for 10 years. Closing cards will not help the AAoA.

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+1

Closing accounts do not add to or lower your AAoA and will stay on your report for 10 years.  People close cards becuase they have to many and can't manage them all or because of annual fees on a card they don't need anymore.  If you can manage the cards keep them.  If not, close the ones you don't really need or use. 

And to get the most bang for your buck on your FICO score let ONE card report a balance with a utilization between 1% and 9%.  Having a ZERO balance on all cards can actually lower your score.  Play with the 1%-9% until you find the sweet spot FICO likes for you. 

[ChesterPDexter]

Thanks to both of you.  I had forgotten that AA is computed by all accounts, not just ones that are open.

I had also forgotten (or never really knew) about the 1-9% utilization on just one card.  THANKS very much for these tips, we really appreciate your help.

[ChesterPDexter]

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@kjm79 wrote:

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And to get the most bang for your buck on your FICO score let ONE card report a balance with a utilization between 1% and 9%. 

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Sorry if this is an excessively detail-oriented question, but do you mean between 1-9% of that card or of the total available credit between all of the open cards?

[Walt_K]

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@ChesterPDexter wrote:

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@kjm79 wrote:

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And to get the most bang for your buck on your FICO score let ONE card report a balance with a utilization between 1% and 9%. 

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Sorry if this is an excessively detail-oriented question, but do you mean between 1-9% of that card or of the total available credit between all of the open cards?

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It's 1-9% of that card.  And just so we're clear, you just let 1-9% report.  So you pay the card down to 9% or less of its credit limit before the statement generates.  Then, after your statement cuts, you pay the remainder so that you don't pay any interest.  Your report will reflect your statement balance. 

[ChesterPDexter]

I meant to ask that, too, Walt, but I forgot and you beat me to it.  Thanks. 

As you can tell, I'm excited about this.  My cards are still a mess but at least one of us is cleaning up the scene.  The last time I cleaned up my scene lots of new credit was offered.  The husband is just hoping to expand on the USAA since they're very good cards and the rest of his cards are more or less a pile of garbage.  (No offense to anyone who likes the HSBC "rebuilder"-type cards, but most people want to get away from them when they can.  And the Target $500 card - 'nuff said.

Target is trying to get rid of their card business.  I'm surprised they have not closed the card down yet since we have traditionally PIF'd it to avoid paying a penny of their 24% interest.  Sam's Club and Chase have already sent letters enticing us to not use the card and make minimum payments (as if we don't already) for tiny monetary rewards.

I figured out their scam, though.  The current balances we are paying on are at 23%.  Any new balances going forward will be charged at 24%.  They're trying to help us "make room" so they can charge 1% more to us. LOL - what pikers they are.  I'm going to have a party when we're rid of the balances on the Sam's Club card, fake Discover (HSBC with small limit and annual fee - in fact, just after closing we're going to request a check sent to refund the annual fee that they're charging, like, today.  Maybe that will fund our little party ! 

[vanillabean]

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Having a ZERO balance on all cards can actually lower your score.

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Sometimes for the wrong reason. The status date indicates whether there has been any activity on the account for the month gone by (if not, then no updated status), and that is what should count (because you're using credit responsibly), not the closing date balance.

My EQ FICO was 806 a few days ago; I had activity on all my cards, but all reported balances were $0 (because I paid them down in full before the closing date of each card). I'm not complaining; if you can get that kind of score at the baseline, that's ok with me.

One of my cards has now reported a $10 balance, returning my EQ FICO to 813. $1 would have done the trick just as well, I'm sure.

[ChesterPDexter]

my-own-fico:

You guys are wizards.  Thanks so much for the information.