Closing 4 of my 8 Credit cards

[Anonymous]

Here is what I have...

5/3 Bank. 6100 limit. Opened this month.

HSN.1000 limit. Opened  3/2017

Pier 1. 1000 limit. Opened 3/2017

Cap One Quicksilver One. 1000 limit. Opened 4/2014

Target Redcard. 800 limit. Opened on 3/2017

AMEX BCE 500 limit. Opened last month

Kohls 300 limit. Opened 3/2017

Indigo Visa 300 limit. Opened 9/2016

AAoA is 36 months (I have older accounts etc). My utilization is 2%.

I cycle these cards two at a time and put minimal on them and PIF when the bill comes. I will never be late on a payment but rotating them is becoming a pain. I would like to close the HSN, Pier 1, Target and Indigo. My Utilization won't take a hit because I barely put anything on my cards (and utilization doesn't have a memory) and the 5/3 helps because of the 6100 limit. And I have read that closing them won't hurt my AAoA because it will stay on my report for 10 years.

The cards I want to close is because they were for credit building purposes and don't wanna cycle them around now and I am buying a home next July so would closing these hurt me at all in my home buying journey? I don't think it would but just wanna get some different opinions.

[Anonymous]

It sounds like the problem may be your perceived need to "cycle" those cards.  What about the possibility of just not using them?  You could then maybe use them one last time eight months from now to just give them one last bit of activity prior to the home purchase. 

The mortgage models do tend to like seeing one account with a balance and several others with a $0 balance.  It's quite possible that four cards will generate every possible extra point you could get from that, but if that idea is mistaken you can't correct it later.

I note that you say that the closed accounts will stay on your reports for ten years.  Better is to say that they probably will.  The creditor (or CRA) could delete them in entirety a month after closure.  It's uncommon but it can happen.

[Anonymous]

I'll have the other 4 cards open and paid on time. And I understand the zero balance and one card reporting at 9% or lower theory. I don't see the point in having them when I basically don't need them at this point. The 5/3 card was a game changer for me so I can drop the store cards and the the AF Indigo card. Gotta keep the Kohls though. You get many perks from having their card and I like shopping there. I'm just getting paranoia about making any changes right now so close to buying a home. I'd rather not have them but if it's smart to keep them open then so be it. But on the othe rhand if not having them won't change things one bit then I'd rather rid of them.

[SouthJamaica]

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@Anonymous wrote:

Here is what I have...

5/3 Bank. 6100 limit. Opened this month.

HSN.1000 limit. Opened  3/2017

Pier 1. 1000 limit. Opened 3/2017

Cap One Quicksilver One. 1000 limit. Opened 4/2014

Target Redcard. 800 limit. Opened on 3/2017

AMEX BCE 500 limit. Opened last month

Kohls 300 limit. Opened 3/2017

Indigo Visa 300 limit. Opened 9/2016

AAoA is 36 months (I have older accounts etc). My utilization is 2%.

I cycle these cards two at a time and put minimal on them and PIF when the bill comes. I will never be late on a payment but rotating them is becoming a pain. I would like to close the HSN, Pier 1, Target and Indigo. My Utilization won't take a hit because I barely put anything on my cards (and utilization doesn't have a memory) and the 5/3 helps because of the 6100 limit. And I have read that closing them won't hurt my AAoA because it will stay on my report for 10 years.

The cards I want to close is because they were for credit building purposes and don't wanna cycle them around now and I am buying a home next July so would closing these hurt me at all in my home buying journey? I don't think it would but just wanna get some different opinions.

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I see no problem in closing cards you don't need, but there's no guarantee they will stay on your reports for 10 years. I've had some closed accounts disappear from my Equifax report in a year or less.

[SouthJamaica]

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@Anonymous wrote:

It sounds like the problem may be your perceived need to "cycle" those cards.  What about the possibility of just not using them?  You could then maybe use them one last time eight months from now to just give them one last bit of activity prior to the home purchase. 

The mortgage models do tend to like seeing one account with a balance and several others with a $0 balance.  It's quite possible that four cards will generate every possible extra point you could get from that, but if that idea is mistaken you can't correct it later.

I note that you say that the closed accounts will stay on your reports for ten years.  Better is to say that they probably will.  The creditor (or CRA) could delete them in entirety a month after closure.  It's uncommon but it can happen.

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+1  Agreed on all counts

[driftless]

Closing rebuilding cards, particularly if they are store cards, is part of the rebuilding process.  If rotating them is a "pain" get to the number of cards that are in your comfort level.  

[Anonymous]

It's great that you are thinking carefully through this decision and trying to make a decision that is best given future needs. 

One thing I notice (which didn't jump out at me at first) is that many of the cards you want to close were opened only a few months ago.  I'd use this as a teachable moment for yourself.  Any time you open a card and then decide you don't lilke it and want to close it a few months later -- that should alert you to the likelihood that you didn't fully have a plan at the time.  Opening accounts and then closing them very soon after only hurts you (by lowering your AAoA).  The one exception might be opening a credit card with a huge signup bonus and then closing it to avoid the next annual fee, but even so you can usually downgrade it to a no annual fee version and regardless don't need to close it till month 11 at the earliest.

I didn't quite see this in my post because you describe these as cards that had been opened early in your rebuilding process.  So I didn't look more carefully to see that they were opened 4 months ago.

I think the emphasis I'd make again is addressing the whole issue of rotating or cycling.  That is the real thing that is irritating you.  So I'd stop that and you've solved the problem of being psychologically burdened.  You don't need to do with it your remaining cards either.  Just use your cards for the things you need.  And maybe two months before your pre-approval, make sure all cards have been used for something small if they have been inactive -- and then pay them to $0.

I also don't see a problem with closing two of the cards you hate the most.  It's just that going from 8 to 4 felt (to me) like too much, given that you have this important loan coming up.

[Anonymous]

Thanks for the info. I did have a plan but that wasn't to have 8 credit cards. Lol. I figured by getting the department store ones and having a Cap One I'd just go with those to build my credit. I never thought I'd get AMEX and especially the 5/3 card with the big limit (to me) so soon and I couldn't pass up the offer for those two. Now that I'm cycling through all of these I'd rather drop the department store ones but I think I'm going to err on the side of caution since I'm getting closer and closer to buying a home and just keep them open until I buy. Once I move into my home then I will cancel those cards. I think that's the safest bet for now.

[Anonymous]

I would keep the Target as you get 5 percent off at Target.  Even if you don't shop regularly there you will probably find yourself there at one point in the future.  Like others said you don't need to rotate your spend.  Just use whatever is most beneficial to you.