When is it time to cancel?

[Anonymous]

Credit cards you don't want/need? Like fingerhut for example. I have a couple. Or just not use it and ignore it?

[Anonymous]

You shouldn't cancel cards because:

1. Lowers AAoA over time

2. Reduces available credit, thus increasing util

3. Why cancel something without a fee?

That's conventional logic. I, however, feel that canceling cards you don't use or want is fine. Impact on your credit score will decrease over time. Having excess cards eventually becomes a headache to juggle and increases the risk of them being exposed to fraud.

[pipeguy]

I've canceled 6 cards over the last week - 4 have already reported to the CRA's as closed by consumer ($00 balance) with NO drop in FICO scoring.

I do have a lot of cards and available credit, but I'm a firm believer that if you have no use for a card or have out grown it, cancel it rather than have other lenders worry that you have too many open accounts and don't need additional credit or CLI's.   

[takeshi74]

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@Anonymous wrote:
Credit cards you don't want/need? Like fingerhut for example. I have a couple. Or just not use it and ignore it?

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Up to you to determine.  There isn't one approach that everyone uses.  I close out any cards that are not useful to me.  Others keep everything.  Yet others keep anything without an AF.

Use this info (linked in the Helpful Threads sticky in the Credit Cards subforum) to aid you in your decision making.

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=117125&jump=true

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@Anonymous wrote:

Reduces available credit, thus increasing util

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While technically true one should do the math before and after to determine if the impact is significant.

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@Anonymous wrote:

Why cancel something without a fee?

That's conventional logic

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It's not really logic as much as it is preference.  It may be a popular approach on myFICO but, again, that doesn't mean it's the best approach for everyone.  Preferences vary from person to person.  One should decide to open or close relying so heavily on AF.  There are many other considerations as well.  Some can only manage X cards and may need to close out a card to keep X mangeable.  If one is going to SD a card then one must continue to actively monitor the SD'd cards for fraud and some aren't willing to do so.

For me, the question is "Why keep an account open that is of no use to me?".  My AAoA and profile are just fine without such accounts.

It's really up to the OP to determine when to close based on the OP's preferences and the data on how one's credit is affected by closing a card.

[Anonymous]

Well. I could always just take them out the wallet, and stash them in my closet and not use them. Or If I need anything from those lenders, and have the money just PIF after buying. I've been in rebuilding mode for about 8 months. When I got CK at the time it said my score was around 560. Not its 634, yet fico says im about 601. Idk what im doing wrong other than too many HP lol. Maybe wait for those collection accounts to fall off next year.

[takeshi74]

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@Anonymous wrote:

Idk what im doing wrong other than too many HP lol. Maybe wait for those collection accounts to fall off next year. 

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That's it right there.  Derogs tend to have a significant impact -- particularly if they are more recent.  They will drag your scores down until they age and/or come off your reports.  If you want to see improvement then hit the Rebuilding subforum and see what you can do to address them.