is it bad to have new accounts with smaller limits than my old accounts?

[mgs2010]

I just got a 400.00 lowes card, a 250.00 shell card, and a 300.00 bestbuy rewardzone gold mastercard (no annual fee)

cards I already have are:

citi: 18,000

BOA: 7,200

Chase: 7,300

Chase:1,000

Discover: 4,850

HSBC: 4,500

Kohls: 2,000

Capital 1: 9,500

I guess I'm getting bored with what I have. credit gardening is lame. I'm only 22 I think my collection is pretty impressive considering but for some reason I leave most of those cards in the sock drawer. I use them once in awhile and usually PIF except balances i have on citi, cap1, and Chase. all the rest are PIF every month. Should I just close the new cards? I don't want other banks to look at me like i'm high risk or something. Do you think I got low limits because of all the open credit I already have but don't use?

I got bored and went on an app spree....I'm sure I'll regret it later. I know its bad to close cards but all the limits I got seem like garbage. However, I was thinking of at least keeping the Best Buy because I don't need to carry those high limit cards around I could end up in more trouble than I am already (about 19k in cc debt) so the best buy I can easily PIF if maxed out.

[laz98]

I agree. If you already have 19K in cc debt at your age, you probably shouldn't be applying for more credit.  JMO.

[mgs2010]

Yeah, it is a lot of debt for my age but I have a good job and make good money for someone my age...and my credit card debt was worse...slowly getting it paid down. Should I close all the new cards I apped for? I don't know what to do. I know I shouldn't have apped in the first place, what i have avaliable is plenty..

[Anonymous]

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@mgs2010 wrote:

cards I already have are:

citi: 18,000       Capital 1: 9,500     Chase: 7,300     BOA: 7,200      Discover: 4,850    HSBC: 4,500    Kohls: 2,000     Chase:1,000   

I guess I'm getting bored with what I have.    I'm only 22    ...     I am already (about 19k in cc debt)  ...

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Me three !!   I agree with you two.   

You already have 8 ccs with total of $54,350 CL along with 19k debt.   Of cause no one going to give you CL more than what you got.  You should be happy with that you got approved for 3 more ccs with total of $950 CL even with your 19k debt and high total CL for age 22.  

Remeber, No More CC Shopping until you pay down your debt!!   Then, try for Amex if you like ...

[mgs2010]

So should I keep them or get rid of them? I'm just wondering if it will make my credit look worse later on after paying most of this debt off because then i'll have accounts with high limits and more recent accounts with small limits. or do the limits not matter? Confused.

[homerunstacy]

19k is plenty of debt to carry at any age regardless of salary.  Think about how much you waste on interest payments alone. Kudos for working on paying them off.

When I wanted to pay off all my cards I cut them up. I used a spreadsheet to manage the debts and pay down the cards.   The only card that I actually kept in my wallet was my debit card for several months.   When they were paid off I ordered replacement cards for the ones I paid off vowing never to carry a balance again month to month.

The new CC's-  I suggest you cut them up but not cancel them unless:

1) They have AF's

2) You think you will be tempted to use them before you stop carrying balances month to month

3) You think it will take more then a few more months to get rid of the 19k  (cancel the cards before the banks cancel them due to inactivity)

[okiesean]

Lowes is GE Money Bank so the computer will decide if you get an increase or not but I have heard of those cards growing with you so you might use the Lowes card for batteries or light bulbs or some other small household use that way you get activity and your not buying anything you wouldnt normally buy. PS Summer is on the way and you might need some outdoor stuff if you mow your own lawn or garden.

Use the Shell card for a tank of gas or maybe something to drink and a snack once a month and it will get some activity. Last I knew Citibank was backing the Shell card so it can grow too but in my local area the Shell gas stations are usually the highest priced ones when it comes to gas so I would do some comparative shopping before using that card too much.

The Bestbuy card, hmm well its the one you wanted so I guess keep it. I have seen on the boards that the HSBC cards arent giving out CLI lately so you may get one and you may not. Perhaps you can let your cell phone bill or some other regular bill charge to it and pay in full monthly that way it gets activity but nothing too much.

At some point you may experience some AA with the high limits and higher than desireable debt load your managing even if your managing it well. I would be prepared and try to get the highest APR paid asap. Some people have better luck paying off the smallest balances first so they see some headway. Its your call but in the end, the best thing would be to pay down the balances and get out from under all the debt even if you have to cutback your lifestyle to get it done.

Congratulations on some good limit cards and maybe the new ones will grow. You have the ding in your score for the inquiries and the new accounts so you might as well get one years use out of them before deciding to axe them.

[Anonymous]

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@mgs2010 wrote:

So should I keep them or get rid of them? I'm just wondering if it will make my credit look worse later on after paying most of this debt off because then i'll have accounts with high limits and more recent accounts with small limits. or do the limits not matter? Confused.

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Well mgs2010,  you already spent some of your pts to get these ccs.  So, keep them and use them to show that you are responsible.  Make sure PIF every month, and pay as much as possible on 19k debt to reduce it.

[Anonymous]

With 19K of revolving debt even with a 100K salary it will be quite a while before you pay all of that off, unless you stop saving money and throw 100% of what you save onto the cards to bring your debt down.

You should not apply for any more revolving debt until you have your balances down to 10% and lower on EACH account. 

If you want to pay the debt down quicker, go through your cards and see which ones have room for balance transfers and also have the lowest APRs.   Put those cards in your sock drawer and DONT charge anything new on them.   Balance transfer all the debt you have and spread it across those 3 cards (or if Citi is your lowest, put as much as you can on Citi).   Your FICO will go down because you're filling up some of your cards close to their limits, but you will be paying your total debt off faster that way.

When you get your debt down below $5,000, you can BT your balances out and spread them around so your overall utilization goes back down and your FICO will zoom back upwards.   You will also have more age history on your accounts by then so you'll get bonus FICO points for that as well.

[Anonymous]

bunnyrabbit, with 19K in revolving debt s/he shoud NOT be using the cards other than for small charges to keep the issuers from closing the accounts for inactivity.

To get the 19K down, the amount of new charges needs to be LESS THAN what you're paying on the CC bills each month.    I would look at it like this:

If I pay $600 a month towards my 19K debt, then I will not charge more than $300 of any NEW DEBT on the cards.   That means each month the total balances on the cards goes down by $240 or so (depending on how much finance charges you accrue every month).

If I pay $600 a month towards my 19K and charge NOTHING on the accounts except for very small charges like gum, coffee, cigarettes, whatever... that means almost 100% of my pay-down goes towards the total debt balance.

Keep in mind that most credit issuers don't flag accounts as inactive until at LEAST 6 months of inactivity have passed and many won't flag them inactive until 9-12 months out and most issuers won't consider an account to be inactive as long as it as a balance on it.   Except for AMEX and a very short list of others, most banks and CU card issuers looking to close inactive accounts are searching for any accounts that have no activity at all on them... which would be $0 balance accounts (paying a CC bill counts as an activity).