| Cancel Credit Card or Not |
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10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
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| Cancel Credit Card or Not |
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I have way too many credit cards and I want to go down to just two or three.
I was thinking to just keep a MasterCard, Visa, and a American Express or Discover.
I have a few department store cards and I am going to cancel all of those.
What is the best way to go about canceling these cards?
Should I just keep the couple that have the highest credit limit?
Should I cancel them all at once or a few at a time?
I know the FICO score looks at how long the account has been open but I have one old credit card that only has a $500. credit limit that I never use.
Any suggestions?
Thanks
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Wed Jun 27, 2007 7:57 pm |
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chillin5978
New Member
Cash: $ 1.80
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Joined: 22 Jun 2007
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| Cancel Credit Card or Not |
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I would keep the cards that have the lowest APR and cancle the rest.
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Wed Jun 27, 2007 10:51 pm |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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According to my free credit report, I still have some department store credit cards on my record that I would not even know how to cancel, since in many cases, stores sold out or sold their credit division, and I moved and probably do not even have the cards anymore.
Even cancelling a credit card is not always certain. When I wrote to Discover Card telling them to close my account and not accept any further charges, they said OK, but if any other charges come in, the account will be reactivated.
I have had one CC account for over 30 yrs through several buyouts and name changes. It is the only card that still lets you skip your holiday bill due in January with no penalty (except the interest) if you have been up to date for the past year.
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Wed Jun 27, 2007 11:28 pm |
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10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
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So does it hurt your score if you have many open accounts?
I would like just to have 3 and I was going to open a new credit card account by transferring a couple of small balances on cards I wanted to cancel?
Thnaks
P.S.
What bad would happen if I did cancel some accounts? Could I not rebuild my fico score up if it dropped a little due to canceling some cards?
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Thu Jun 28, 2007 12:52 am |
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No-Brainer
Senior Member
Cash: $ 83.45
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Joined: 29 Dec 2005
Location: Oregon USA
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One thing to keep in mind is it does effect your debt to income ratio. Anyone considering making you a loan will assume your entire credit limit is potential debt, because you can run it up at will.
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Thu Jun 28, 2007 1:12 am |
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10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
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I have a head ache now 
So how many credit cards and department store cards do all of you currently have?
Thanks
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Thu Jun 28, 2007 1:40 am |
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10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
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If I do cancel some cards and my FICO score drops how long does it take to build it back up?
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Thu Jun 28, 2007 2:38 am |
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10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
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Thanks coaster,
I am going to do some more research before I decide what to do.
It sounds like you are doing things right so I value your opinion.
Thanks again
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Thu Jun 28, 2007 3:31 am |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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Just for reference I think I have 6 major credit cards, and several department store credit cards that I lost track of, but are still on my credit report. I was only a few days late with one payment (when weekend due date caught me off guard), but that was less than 30 days late, so may not have even counted.
Someone attempted to fraudulently use one of my credit card numbers, but that was nipped in the bud when they used the wrong name. There was only one local charge for $205 at a drugstore I could not identify at a time when I was out of state, so that was dropped.
When I refi'd in early 2005 with about $5000 CC balance (most at 2.99% and some 0%), my Transunion score was something like 771.
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Fri Jun 29, 2007 12:53 am |
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beachchica
New Member
Cash: $ 0.85
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Joined: 21 Aug 2007
Location: Panama City Beach, FL
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| For 10can-advice |
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I would definitely keep the oldest account on your report. It is typically not good to cancel your cards because it destroys your credit history and every card counts. If you feel you have to many you can just stop using them. The damage that is normally caused by having too many accounts has already been done. Closing them could make it worse. If you still want to cancel them, make sure that there are no "inactivity fees" or "annual fees" on the cards you keep. If they have either of those and you don't plan on using them, I would call the companies up and ask them to cancel the card...they will send you to a customer retention department in which they will do "whatever it takes" to keep you as a customer. This includes waiving any fees, lowering your interest rates and even raising your limits. Raising your limits will actually increase your score because it will increase your debt to credit ratio. This tells the FICO system that you have credit cards that have large limits but are not being heavily used. It is looked down upon to "live" off of your cards. You want to make sure that the total amount of credit granted divided by the amount you owe is under 30%. Ex. (if you have a card with a limit of 10k, you should never use anymore than 3k of that card)
If I were you, I would call every card company you have, tell them you want to have your percentage rate dropped. Then tell them you want to raise your limits (based on the credit info they already have. you don't want them pulling a hard inquiry on your report because they already have soft inquiries they pull every couple of months. A hard inquiry will cause you to lose a couple points). If you have been paying your bills on time, this shouldn’t be a problem. If you have any cards with annual fees, call them and have them waived. If they refuse, cancel the card. This will either make them change their mind or help you decide which card to cancel (if you are still wanting to go that route.)
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Thu Aug 23, 2007 1:17 am |
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