Save thousands in interest or worry about higher util

[Anonymous]

An update- They now agreed that I could leave 3 of the 4 open, only close the BOA Gold loan with the $18k limit. This account was just opened 2 months ago, so shouldn't hurt my average account age. I might get hurt on Utilization, but not as much as before. They are also raising my overdraft protection limit and lowering the interest rate on that, which should help some. I have seen a lot of times credit unions recommended, I definitely recommend them as well. I will let you all know what happens to my score the next few months. I couldn't pass up the huge interest savings I am going to pick from going from over 20% interest down to 6.99%. I did express my concern about a new mortgage in a few years, they assured me that they should be able to help with that, provided all goes as planned.

[haulingthescoreup]

---

@Anonymous wrote:
An update- They now agreed that I could leave 3 of the 4 open, only close the BOA Gold loan with the $18k limit. This account was just opened 2 months ago, so shouldn't hurt my average account age. I might get hurt on Utilization, but not as much as before. They are also raising my overdraft protection limit and lowering the interest rate on that, which should help some. I have seen a lot of times credit unions recommended, I definitely recommend them as well. I will let you all know what happens to my score the next few months. I couldn't pass up the huge interest savings I am going to pick from going from over 20% interest down to 6.99%. I did express my concern about a new mortgage in a few years, they assured me that they should be able to help with that, provided all goes as planned.

---

Wow, that is great!

Thank you for updating. Always nice to know how it works out.

[Anonymous]

Great news - sounds like you will benefit FICOwise and financially as well.

[athensguy]

Yes, I agree, that is much more reasonable than closing all. Good luck! BoA will let you re-open later, too, probably.

[Anonymous]

How would they even know whether or not you close the other cards? I don't believe they should even have access to this information

[Anonymous]

---

@Anonymous wrote:
Your FICO score is not worth one penny in interest.

---

Well, that's an exaggeration, as a high FICO score can lower your interest payments and do better than the Gecco himself at saving you money on car insurance (in states where insurers can factor in FICO scores). Generally it is possible to have both guns and butter on this issue: you can save in interest and maintain a good FICO score.

Say you're at 90% utilization across the board, and you get a new credit card with a high enough limit to lower that utilization to 60%. You'll get a score boost from the lower utilization, and you can transfer your existing balances to that new card if you wish. Do bear in mind that you will take a small score hit for a new account/decreased average age of accounts...which has nothing to do with interest rates OR utilization; it's a separate scoring variable.

Then, as you pay the card with the highest interest rate, guess what? Your utilization will decrease AND you'll save interest.

The one instance when saving on interest and keeping your FICO score up can be at loggerheads is when you have the opportunity to pay off a mortgage or your only installment loan early. Yes, you will probably take a ten-point hit for no longer having an open mortgage or installment loan.

[Anonymous]

sounds like your dealing with a car salesman. what's with the ultimatum? no respect. well, they can't make you close your accounts "before" they approve and finalize your line and expect you to take that risk, right? that would create a stalemate. sounds like they're trying to strong-arm you into an exclusive account holder unable to get credit elsewhere. "tell" them you will close them, then don't. what can they do?...NOTHING! you can also negotiate with them by asking if you can extremely lower your credit lines with the card companies and see if that would make them happy taking on your risk. don't close those accounts! you need them to balance debt to available credit ratio; and if you can get the new line and re-balance it would be perfect for your plan. good luck... i've been there.

[athensguy]

Sometimes the consolidation company will send a certified letter to the CC company with a check for payoff and a note requesting the account be closed. They don't directly give you the money, and you don't have a choice about closing the accounts.

If they don't do the above, they could still pull an AR on your credit later and see that accounts that were supposed to be closed are still open and call the loan.

[Anonymous]

That's exactly what happened Athens-- I had to sign a form that included the account number and sign it asking that the one account we agreed to close be closed upon the receipt of the balance transfer check. I am happy the way it worked out, the one I closed was only 2 months old, so should balance age of account hit. I will keep everyone informed on what happens when the scores adjust. The other 3 remain open and are now showing 0 balances. Goodbye to high interest rates on those accounts!!

[Anonymous]

An Update, my scorewatch fico score has increased from 651 to 679 so far.