@Anonymous wrote:
I already know that canceling your credit cards can negatively affect your credit score, and right now I have a pretty good score. However,I can understand what "please answer" is talking about. I recently tried to lower my car insurance and one of the factors of why they wouldn't lower it more than they did is because I have too many credit accounts given how long its been since I opened my first one. I have 6 credit cards right now, but most of the time I only use 2 cards, my Visa and Mastercard. I've cut the rest of them up about a year ago in an effort to watch my spending. It used to be some so-called financial advisors would say that when you first start using credit cards, to get at least two or three and use them to build up a good credit rating, so thats what I was trying to do. Now I've gone overboard with department store cards only because I fell for the discounts you get when you first open one. I'd love to cancel my JCPenney and Macys cards, I don't need them. I've also read that if you want to cancel a card, cancel the last one you applied for, and that to compensate for that, try to increase your credit limit on another card and it won't affect your FICO score so much. What does the rest of you think? Please respond if your some kind of expert or if you personally cancelled some of your credit cards. "please answer" might like to know this stuff too.
I'm not an expert...but I have personally cancelled cards. When I cancelled a number of them, we had several cards and used only a few. I didn't have credit monitoring at the time, but I had a credit card that gave me my FICO score monthly. All of a sudden, my FICO dropped 40 points, so I pulled a credit report. One of the cards I never used had instituted an annual fee. I wasn't monitoring my accounts online at that time. I hadn't made any charges, so I didn't pay attention to the bill that came. I was lucky. The credit card company let me pay the annual fee, and they took off the late payment. After all that registered, I cancelled that card as well as a few others.
You said that a car insurance company said you had too many cards. Another poster stated once that he was also shopping around for car insurance, and he was told that he had too many store cards, and that was seen as him being riskier (is that a word...?).
A lot of the answer here is dependent upon whether or not you ever revolve a balance on your credit cards. If you do, then you need to be aware of your total credit limits. In that case, your suggestion was a good one. Try to raise limits on your other cards to make up for the card you want to close. Also, try to keep your balance on fewer cards. Don't have balances scattered all over the place.
Keeping cards you don't want is fine, but it comes with the responsibility of continually monitoring them to see that no balance shows up. Closed accounts do stay on your credit report for up to 10 years and help your average of accounts. I'm glad that I've closed the cards that I have. I don't need a lot of various small balance and/or store cards...but I'm likely a bit further along in my credit life. For me, no harm done.
Message Edited by LynetteM on 01-07-2010 10:57 AM
