| Too Many Open Credits Cards? |
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BBKT
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Joined: 02 Mar 2009
Location: WA
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| Too Many Open Credits Cards? |
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At what point do too many open credit cards (most with NO balances), hurt your credit report/score?
Hubby and I have many credit cards, most don't have balances, a few do and we are working diligently to pay them off and we are not charging anything new to them. Most of the cards are "regular" cards (Visa and Mastercards) and a few are "store" credit accounts (Best Buy and Kawasaki, both through HSBC). Here's a breakdown of our cards with the credit limits and balances:
Mine:
Kawasaki store card through HSBC: 14,000 limit, about 6,000 balance at 6.99% promotional until 6/2010
Chase #1: 6,000 limit, 0 balance
Chase #2: 4,900 limit, 0 balance
Bank of America: 30,100 limit, about 13,600 balance at 9.99% regular rate
Citi: 7,300 limit, 0 balance
NY & Co store card (used once and forgotten about): 500 limit, 0 balance
Hubby:
Best Buy store card through HSBC: 10,000 limit, about 3,000 balance at 0% promotional until 4/2011
Chase #1: 9,000 limit, 0 balance
Chase #2: 4,000 limit, 0 balance
Bank of America: 7,000 limit, 0 balance
Ciit: 11,700 limit, 0 balance
All of the outstanding balances are shared debts between us, and we are "authorized users" and each other's cards, but the above is broken down as to who is the primary account holder.
I've heard that closing credit card accounts will hurt your FICO score because it lowers your debt to limit ratio, so we've just left cards open. The Citi cards we are leaving open because we are thinking about balance transfers to 0% promotional rates. I'm just concerned that having too many open credit accounts will also hurt our score. Any thoughts?
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Sat Mar 07, 2009 9:43 pm |
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littleroc02us
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Your playing with fire and are going to get burned. Get rid of those credit cards. I keep just one that is used for "Needs" (Groceries, Gas) and pay it off each month. I never carry a balance and use it only to keep my credit score up, because that is the game.
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Mon Mar 09, 2009 1:27 pm |
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No-Brainer
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One of the things they look at is potential debt. When you have that many cards open, total all the maximum limits and that's the amount of debt you could have tomorrow with no further approval needed.
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Mon Mar 09, 2009 2:04 pm |
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BBKT
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Cash: $ 4.30
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Location: WA
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quote:
Originally posted by coaster
I don't see any problem leaving those accounts open if you have the discipline not to use them. Yes, closing accounts CAN hurt your credit score. On the other hand, having too much credit available can be a negative in a loan application. So it's six and half a dozen. If you have no need for a loan in the future, I'd just leave them open and put the cards away.
Yes, that is what I was thinking. I haven't used several of these cards in years. They are just sitting in a drawer. I have no temptation to use them, because I am busting my bum to pay off the cards that have balances. I am not applying for loans in the foreseeable future.
However, am I also hurting myself by leaving these unused cards in the drawer? While I will not go on a "spending spree", would it be benefitial to take one or two of them old cards and put something on them and immediately pay it off? Like groceries or something? I guess the bottom line is this: while leaving the cards open- which would hurt me more or be better? To just leave the cards sitting there for years, or to put something small on them once in a while and pay it off? Keep in mind I do have three other cards with balances.
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Mon Mar 09, 2009 8:06 pm |
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Zector
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One way it can hurt having that many open cards, counts as unsecure loans, where some loan holders consider the total minimum payment as if all cards were full and needed payments.
One good way shows you have credit and managing it, if you consider almost 20k on a credit card as proper management ( sorry these are nasty beasts and need to be kept tame at 0$ each month).
Is there a reason you want a high credit score, or trying to improve it? If you have a good rating and standing with the banks, just close most of them. If you are trying to get a good rating, spend a little each month on some of them and keep them paid off. But that many open, I don’t think there is much need for.
I only have 2 cards, 1 visa and one MC, each limit at 10k. Many times we have had to lower the limits back to 10k, it’s all we need. One card if for normal use (points) and the other for emergencies, but both are ALWAYS paid in full each month. Aside from that we have an unsecured line of credit in case of a house emergency and our mortgage. No other cards and our score is over 800, so you don’t need tonnes of cards to get a good score. Store X cards are given away to anyone who can sign their name anyhow, and don’t carry to much weight in comparison to a well kept account.
IMHO cut the accounts down between the 2 of you guys, 11 cards is way too many cards and potential problems. I think that many cards would have more cons than pros, especially when you want to go for a loan.
But do what is right and feels best for you 2, living your life to impress the banks is not the way to go, and they have you. Pay stuff off, only take what you need, and then you have them.
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Tue Mar 10, 2009 1:14 pm |
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samsung123
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| There's a limit |
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If this particular card is just one in a big bunch, you may do well by closing the account. Anything more five, and creditors may see someone who's overextended across too many credit cards. So, if by chance you do pay down your cards and you have too many laying around, it is a good idea to close out the ones you deem the least necessary. That way, your FICO score -- which is your overall credit score distilled into a three-digit number -- will be as high as possible, giving you the good-risk halo that lenders like to see.
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Wed Mar 11, 2009 6:04 pm |
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