Lessons on combining credit cards

[Anonymous]

Hey guys! This is just a heads up for people who are trying to build their scores, or just trying to thin out their wallet, and are considering combining 2 cards with the same lender. I had 2 Cap one quicksilver cards and thought it made sense to just combine them as they were basically the same except that one was a higher limit and "signature" series. So, after doing some research I decided to go ahead and combine them. Everyone said that combining shouldn't drop my score bc the account would still be on my report for 10 years. Unfortunately, as soon as cap one reported to experian the account showed up as closed and my score dropped 5 points. I know 5 is nothing to most people but if you're working hard on building your credit score it can really hurt to see that drop. I'm sure my score will bounce back eventually. If anyone else has experience with combining cards and has had different (or the same) outcomes I would love to hear more about it! Happy building!

[Anonymous]

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@Anonymous wrote:
Hey guys! This is just a heads up for people who are trying to build their scores, or just trying to thin out their wallet, and are considering combining 2 cards with the same lender. I had 2 Cap one quicksilver cards and thought it made sense to just combine them as they were basically the same except that one was a higher limit and "signature" series. So, after doing some research I decided to go ahead and combine them. Everyone said that combining shouldn't drop my score bc the account would still be on my report for 10 years. Unfortunately, as soon as cap one reported to experian the account showed up as closed and my score dropped 5 points. I know 5 is nothing to most people but if you're working hard on building your credit score it can really hurt to see that drop. I'm sure my score will bounce back eventually. If anyone else has experience with combining cards and has had different (or the same) outcomes I would love to hear more about it! Happy building!

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Where are you seeing that your score dropped 5 points?  Credit Karma?  If so, you can basically ignore it because Credit Karma provides the Vantage 3.0 score and not FICO scores.  Vantage scores are not used much in the credit world with the exception being apartment rentals.  For most credit products such as credit cards, auto loans, mortgages and so on FICO scores are used.  It’s important because Vantage scores do not include closed accounts in your AAoA (Average Age of Accounts) while FICO counts any account, open or closed, in your AAoA and closed accounts typically stay on your reports for 7-10 years.  My guess is that you are basing your post off a CK report and as I suggested, ignore it. 

[Anonymous]

Thanks for the reply! I'm getting this info from myFico and the experian site itself. Ck uses vantage but only for TU and EQ. Im very surprised it dropped but I'm hoping for a bump as the higher credit limit on the card that's still open is reported. I wonder if this has happened to anyone else...

[HeavenOhio]

@Anonymous, the gurus in the scoring forum tell us that VantageScores do in fact include closed accounts in the account age stats. It's Credit Karma's fluff front-end software that breaks them.

Credit Karma can also break utilization stats by rounding utilization percentages down. Several sites, including some sites that provide FICO scores, have that issue.

@Anonymous, how many open cards do you have? And how many of them are reporting non-zero balances? Did your utilization go up, either overall or on an individual card? I think the cause of the score decrease may lie somewhere within the answers to those questions rather than the closure itself.

[Anonymous]

@HeavenOhio thanks for the ck info. I try not to pay attention to ck scores very much. I currently have 5 cards ( quicksilver 8750, chase unlimited 3500, venture one 12000, citi dbl cash 2300, Macy 1100). At the time I believe 2-3 were reporting a non 0 balance but under 4% of total available. I always pay in full by the end of the period. I think you're probably right though, I had just put 1k on one of my cards. Probably just a timing thing. If that's the case it kind of sucks that I would get dinged for using such a small amount of my available credit. Thanks again for your input.

[Anonymous]

Have you pulled your reports since one of the Cap One cards reported closed?  If so, I encourage you to look closely at the Date Opened for each card.  If the DO for each card is very close to the other, then it doesn't matter.  But if one card was significantly older than the other, then you want to double check and make sure that they closed the younger card.  That won't affect your score now, but it will when the closed card falls off your report.

[Anonymous]

Yup I closed the older one... Screwed myself once again. I thought it would be better to move the lower limit card to the larger, plus the larger was signature and the smaller wasn't. Ugh this is frustrating. So I killed my aoaa....

[Anonymous]

Nope, closed accounts count toward your AAoA just as much as open ones.  So the closure of the older account had zero impact on your current AAoA.  Where there might be an impact is ten years from now when the closed account falls off. 

Was the older of the two Cap One cards also your oldest credit card period?  If so, what was its age and what was the age of your 2nd oldest card?

And just for clarity, what is the age of each of the two Cap One accounts?

[Anonymous]

OP, I don't believe that your score dropped from closing a CC.  It sounds like you received an alert due to the one account being closed and at the time time you were provided with a new score.  This doesn't mean that the score change has anything at all to do with the alert reason you received.  My guess is that these two events are unrelated. 

One thing that could result in a 5 point drop would be a penalty for your percentage of cards with balances reported crossing a threshold.  For example, if you had 5 total cards and 2 of them had reported balances, that's 40%.  If you then closed 1 of the 5 cards, you could have ended up at 2 of 4 cards with reported balances, or 50%.  Going from 40% of cards with reported balances to 50% of cards with reported balances could potentially result in a 5 point score drop. 

[Anonymous]

Yes the older of the 2 cards was my oldest open account. The older card (closed) is from 2013. The one I combined it with was opened 2015.

@brutalbodyshots, I think you're right. I was recently told to let a small balance report to boost my score a little, but I didn't realize that I should only carry it on one card. This is why I love fico forums. I wish I could change the title of this thread now haha