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Hello all.
I am a BK7 discharged 2 years ago and have done a decent rebuild since that time. Right now I have 13 credit cards, and 1 loan $7100 balance (high rate).
I recently was approved for a new loan that will pay off the existing loan, and enough extra to pay off all my credit card balances. It is resulting in a savings of $200 a month or so. But I want to take this time to do whats best for my over all score.
Of my 13 credit cards I want to close the early cards I got in my original rebuild journey. The ones with high APR and annual fees. The question is, will this hurt my credit score more than just keeping them? Most of these cards are lower amounts. I want to close 3 of the 13 cards.
Here are my cards:
Fortiva - $2850/$2000 Balance
Merrick - 1500/$200 Balance
Playstation Cap 1 - $1250/$0 Balance
Discover IT - $1250/$0 Balance
Vibe Credit Union - $1000/$0 Balance
First National - $1000/$0 Balance
Mission Lane - $1000/$0 Balance
Show Mastercard - $750/$0 Balance
Cap One QS - $500/$0 Balance
Indigo - $300/$0 Balance
Target - $500/$0 Balance
Wayfair - $500/$0 Balance
The only ones with a balance are Fortiva and Merrick. Even those I anticipate paying off within another month or so. I am pure gardening at this point and dont need credit for anything other than scores. Future goal is a home purchase.
I want to close Indigo, Show, and First National for now. What do you think the impact would be?
Also, the new loan hasnt updated, nor the pay off of the old one. What kind of effect will that have having a loan showed paid off, but a new one in its place? Break even? (Loans are very close to same amounts)
Thanks for any tips all.
@C_DUBYA wrote:Hello all.
I am a BK7 discharged 2 years ago and have done a decent rebuild since that time. Right now I have 13 credit cards, and 1 loan $7100 balance (high rate).
I recently was approved for a new loan that will pay off the existing loan, and enough extra to pay off all my credit card balances. It is resulting in a savings of $200 a month or so. But I want to take this time to do whats best for my over all score.
Of my 13 credit cards I want to close the early cards I got in my original rebuild journey. The ones with high APR and annual fees. The question is, will this hurt my credit score more than just keeping them? Most of these cards are lower amounts. I want to close 3 of the 13 cards.
Here are my cards:
Fortiva - $2850/$2000 Balance
Merrick - 1500/$200 Balance
Playstation Cap 1 - $1250/$0 Balance
Discover IT - $1250/$0 Balance
Vibe Credit Union - $1000/$0 Balance
First National - $1000/$0 Balance
Mission Lane - $1000/$0 Balance
Show Mastercard - $750/$0 Balance
Cap One QS - $500/$0 Balance
Indigo - $300/$0 Balance
Target - $500/$0 Balance
Wayfair - $500/$0 Balance
The only ones with a balance are Fortiva and Merrick. Even those I anticipate paying off within another month or so. I am pure gardening at this point and dont need credit for anything other than scores. Future goal is a home purchase.
I want to close Indigo, Show, and First National for now. What do you think the impact would be?
Also, the naew loan hasnt updated, nor the pay off of the old one. What kind of effect will that have having a loan showed paid off, but a new one in its place? Break even? (Loans are very close to same amounts)
Thanks for any tips all.
For your revolving credit cards you can calculate it below.
Aggregate
Total Credit Limit - Combine your total available revolving credit card limits.
Credit debt/balance - Combine your total credit card debt/balance.
Credit debt/balance divided by Total Credit Limit = utilization.
Individual
Same concept as above but for individual credit cards.
Remember these utilization thresholds: 8.9%, 28.9%, 48.9%, 68.9%, 88.9%. If you are not crossing a scoring threshold, then it should not affect your score.
You can do a before and after and see if closing the mentioned cards will affect your revolving aggregate utilization.
Your Fortiva has a high utilization so that is hurting your score.
There wont be any impact on your scores unless utilization changes. Wait till you pay down Fortiva, than close what you're not going to use. Closed account stays on your CR up to ten years and your other cards are same age, so no loss there even when it drops off
I think you should close the bottom 3 listed.
Then wait a couple of months and see if that Cap1 CL can be increased. If it can’t, then it may be worth opening a new Cap1 and closing that one. It may be stuck at that limit
if you already have the new loan and have paid off the cards, you can go ahead and close the CC’s now
When did you start your rebuild journey and what are the ages for the accounts you've listed? Payment history and utilization are the primary drivers, but I'd be real reluctant to close anything with AGE representing 15% of your score. As mentioned by another person, I'd request an increase on your CAP ONE QS and maybe 2-3 others that you plan on keeping.