Why Close Credit Cards?

[creditguy]

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@Anonymous wrote:

I lick my cards, and close the ones that don't taste good.

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Thats about as solid a method for closing as I've ever heard. 

[Anonymous]

As an overgeneralization, when people are new to credit, or just coming off rebuilding, it's hard to see why you would want to close (especially a non AF) card, as it was an achievement to get.   For those much later in the game, an individual cc can have much less value (contributing little % wise to overall CL, and not particularly hurting AAoA even when it stops reporting).   So closing (ro minimize management, or to be better positioned to get a better card) is much less of a hard decision, if it's no/little use, it can get closed.

[wacdenney]

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@Mattopotamus wrote:
Unless the card has an annual fee, leave it open. It helps with your overall utilization and AAoA. Most of us either have a credit monitoring service or keep up with our cards so fraud is just as likely whether you have 1 or 10 cards.

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Yeah, I have to agree with this.  The whole card closing frenzy of late is a new trend that you really didn't see here a year or two ago and I honestly don't really buy into it.  The only reasonable argument I've ever seen is over exposure, but in reality for me I've found that higher limits have led to higher limits.  I've honestly never seen a situation where a person cutting all their limits has led to higher limits. 

There are also situations where you simply outgrow cards.  Once you are out of the sub-prime arena then sure close your First Premier or Cap 1.  Generally speaking though, if there's no AF then I believe holding on to the account is an overall net gain.

[kdm31091]

I personally just don't like keeping tabs on cards that I"m not using and provide me no benefit. Once you have a few cards with decent limits, if you are always keeping your utilization low, there's no (IMO) benefit to just throwing a bunch of cards in a drawer for a buffer that you have to keep track of.

Some people prefer to just keep things open that have no fee, but realistically, once an account is opened, all of the FICO factors other than utilization would remain the same whether you keep open or close the card. Your AAOA is dinged immediately and other than that, no real difference. The account will age even if closed, so for 10 years, there's no difference that way. It all comes back to utilization, and again, I just don't see the need for a massive buffer when utilization is fluid anyway and means nothing in the long term.

If you want to just keep accounts open because they don't cost anything, I understand the viewpoint, but you still have to monitor for fraud and I'm still not sure what the real benefit is, if the card isn't otherwise useful.

[Blodreina]

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@kdm31091 wrote:

I personally just don't like keeping tabs on cards that I"m not using and provide me no benefit. Once you have a few cards with decent limits, if you are always keeping your utilization low, there's no (IMO) benefit to just throwing a bunch of cards in a drawer for a buffer that you have to keep track of.

Some people prefer to just keep things open that have no fee, but realistically, once an account is opened, all of the FICO factors other than utilization would remain the same whether you keep open or close the card. Your AAOA is dinged immediately and other than that, no real difference. The account will age even if closed, so for 10 years, there's no difference that way. It all comes back to utilization, and again, I just don't see the need for a massive buffer when utilization is fluid anyway and means nothing in the long term.

If you want to just keep accounts open because they don't cost anything, I understand the viewpoint, but you still have to monitor for fraud and I'm still not sure what the real benefit is, if the card isn't otherwise useful.

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Strongly agree, kdm.

[Anonymous]

Fraud is a valid reason to cancel old lines but due to my age(27) and my short AAoA(3.5 years) resulting from many new accouts in the last 2-3 years, I have no desire to close any older unused accounts until my average age goes up. I just use Mint to keep track of activity, transactions, and balances all on one screen.

[dragontears]

The decision to close a card is a personal one and everyone is different. As some others have said, just because person A finds it easy to manage X many cards it does not mean person B finds it easy.

If a card benefits you keep it open, if a card no longer benefits you close it. But it is up to the individual to decide what "benefit" means.