Too many credit cards

[Anonymous]

I have several credit cards with large credit lines and zero outstanding balances due.  I use two or three different credit cards for all my purchases every month, and pay off all charges in full every month.  Would it help or hurt my credit score if  I close some of these credit card accounts?  Thanks.

[MarineVietVet]

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@Anonymous wrote:

I have several credit cards with large credit lines and zero outstanding balances due.  I use two or three different credit cards for all my purchases every month, and pay off all charges in full every month.  Would it help or hurt my credit score if  I close some of these credit card accounts?  Thanks.

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Welcome to the forums.

As long as there are no outrageous annual fees I see no reason to close any of them. The number of CC accounts is not all that important in my opinion. It's how you handle those accounts that matters. If you keep the utilization low and try have half or less of the cards report a balance each month you'll be fine. If you are trying to tweak your score for maximum nymbers you might try this:

Total revolving and individual utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

Closing accounts could eventually hurt you by lowering your AAoA (Average Age of Accounts) when they are removed from your credit reports (usually) after about 10 years from closing if they were in good standing.

Here is a good article on the subject that says everything much better than I can: Closing Credit Cards.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work

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[MattH]

From past experience when EX allowed us to pull scores here, I believe EX gives a bit more weight to overall revolving utilization (total owed divided by total available), where the other two give a bit more weight to number of revolving accounts reporting balances and total dollars owed on all revolving accounts.  In my case, because my wife and I carry very little cash and pay our credit cards in full at the end of the month, this means my scores fluctuate as my total balance bounces around.  Most credit card companies report the balance as of when they issue the monthly statement, so if you run up a lot of charges one month and then pay them off right away it looks exactly the same as somebody who has carried a balance from previous months, which I think is kind of dumb.  I think it would be more logical to report the balance as of the due date, because in most cases that's the balance that determines whether a customer is paying any credit card interest.  However, knowing about this quirk of scoring means should I plan on applying for credit I can bump my scores a little by going to my credit card websites a week before their statement dates and making online payments so the balances will be very small on statement day (which could mean paying more than the balance if I expect to make more purchases before statement day).

[Anonymous]

Are you preferring to close one or more of these accounts for some reason?

If you find the number of accounts awkward and would prefer to close one or two for convenience in managing them, you'd probably be fine.

But if you're thinking you need to close them for FICO purposes, Marine's post answers those concerns perfectly.

Just never feel that you must keep more cards open than you are personally comfortable with for the sake of FICO.  You can have a high FICO score with one card.  Three is easier.  More is optional.  Most people try to keep at least ONE of theoldest accounts open for FICO's fondness of aging on accounts - but you don't need to keep ALL of the oldest accounts if you prefer not to.

Congrats on building some nice credit limits on a variety of accounts!