goose Posted January 14, 2008 Report Share Posted January 14, 2008 Hi..my husband and I have been saving and saving and are paying off our credit cards, one by one...We have no bad accounts or anything, the only thing keeping our scores from being "excellent" is our debt to income ratio..and the amount of revolving charge accounts we have open. SO we are in the process of paying off 11 different cards/accounts--they are a mix of store cards, credit cards etc...The question is, once we pay these off, we would like to close the accounts altogether, but we are not sure if this will be helpful or hurtful to our credit. If we close all 11 of the accounts we are paying off, we will be left with 4 open credit card accounts...they are all close to their limit and some have pretty hefty balances, we are just working hard to eliminate the cards in order of lowest balances.Should we leave a few of the accounts open, so that all of our open credit isn't "at it's limit" or will it be fine to close all of them? Thanks for your help! Link to comment Share on other sites More sharing options...
vickinicole Posted January 14, 2008 Report Share Posted January 14, 2008 Hi..my husband and I have been saving and saving and are paying off our credit cards, one by one...We have no bad accounts or anything, the only thing keeping our scores from being "excellent" is our debt to income ratio..and the amount of revolving charge accounts we have open. SO we are in the process of paying off 11 different cards/accounts--they are a mix of store cards, credit cards etc...The question is, once we pay these off, we would like to close the accounts altogether, but we are not sure if this will be helpful or hurtful to our credit. If we close all 11 of the accounts we are paying off, we will be left with 4 open credit card accounts...they are all close to their limit and some have pretty hefty balances, we are just working hard to eliminate the cards in order of lowest balances.Should we leave a few of the accounts open, so that all of our open credit isn't "at it's limit" or will it be fine to close all of them? Thanks for your help!from what I have read and understand you should keep the cards with the oldest credit history OPEN Link to comment Share on other sites More sharing options...
razr Posted January 14, 2008 Report Share Posted January 14, 2008 Don't close them! Sock drawer those bad boys. Use them once in awhile and PIF asap. Closing them will significantly impact your score, since you will show a very high utilization. After you have all your balances less than 30% you might consider closing a few, but generally it's a bad idea to close credit card accounts.And don't pay them off in order of lowest balance, pay them off in order of highest APR.-r Link to comment Share on other sites More sharing options...
willingtocope Posted January 15, 2008 Report Share Posted January 15, 2008 Here's the deal. Close any that charge you a yearly fee. You don't need them...period. Any that don't charge a fee, leave open, but put them away somewhere where they'll only be used for emergencies.The whole "utilization" component of the FICO score that you are permitted to see is bogus...basically, the score you see is the "here's a sucker that CCs can make money off of" score...in other words, having a lot of open but unused CCs will only get you more CCs...is that what you want? Link to comment Share on other sites More sharing options...
rmuse00 Posted January 15, 2008 Report Share Posted January 15, 2008 What cards would you be closing?I agree that you should not close those that will be reflecting the longest positive credit history. That is what would be impacting your FICO score the most. Your credit report is a reflection of your credit history. The longer and most positive credit history is the best. However, depending on how old some are you might be able to close a few and maybe consider doing some balance transferring to your best cards. Let us know what you are considering closing and we might be able to get a better idea of how it could impact your credit picture. Link to comment Share on other sites More sharing options...
goose Posted January 15, 2008 Author Report Share Posted January 15, 2008 Thanks for the info so far..the thing is, I'm HATING having these 11 "extra" cards to deal with, 11 extra statements each month...it's wearing me out! All but 2 of the cards are store cards, old navy, best buy, lowes, sams...etc..The 2 that are actual credit cards both charge an annual fee...so I'm thinking it would be dumb to keep them open and pay a fee each year? Link to comment Share on other sites More sharing options...
flacorps Posted January 16, 2008 Report Share Posted January 16, 2008 And don't pay them off in order of lowest balance, pay them off in order of highest APR.-rIf you focus on the ones with the highest utilization percentages and pay the others slightly above the minimum until all of them are at the same utilization percentage, then bring them down in lockstep, at some point you will get a major score boost which will trigger BT offers at ridiculously low percentages that you can use to reschedule the balances that are at the highest rates. Then focus on bringing the remaining high-rate cards down while paying the ones you BT'd to a bit above the minimum. Chances are you'll get a chance to do a second round of BTs. It's not the debt snowball, and it's not going after the highest APRs first ... it's a strategic approach that allows for the fastest overall payoff. Link to comment Share on other sites More sharing options...
flacorps Posted January 16, 2008 Report Share Posted January 16, 2008 The 2 that are actual credit cards both charge an annual fee...so I'm thinking it would be dumb to keep them open and pay a fee each year?When your scores are high enough you can probably get the ones with the annual fees to drop them, waive them, or refund them (unless they're an Amex Green, Gold, Platinum or Black Centurion). Link to comment Share on other sites More sharing options...
goose Posted January 22, 2008 Author Report Share Posted January 22, 2008 So it's going to be really bad for our credit for us to close all of these accounts? Even if I get them to send a statement indicating it was closed at the account holders request? None of the accounts are over 5 years old...our oldest cards still have high balances on them and we are working on knocking them out next. Link to comment Share on other sites More sharing options...
willingtocope Posted January 22, 2008 Report Share Posted January 22, 2008 As I said, the only credit score closing cards will hurt is the score that they use to determine if you qualify for more cards. The other scores...cars, mortgage, etc...will improve if you have less available credit.Close the ones that are paid off (and charge you a yearly fee). The ones that are paid off and don't charge a fee...put them in your sock drawer. Link to comment Share on other sites More sharing options...
Ahntara Posted January 22, 2008 Report Share Posted January 22, 2008 At some point, you need to get your credit life into such shape that it doesn't stress you anymore, regardless of what happens to your score. If 11 cards is too many to handle, then close some of them.For maximum points, consumers should have between 2 - 4 revolving accounts. This includes HELOC's, so don't forget to add that in if you have one. And your score is best served by using these accounts monthly. With store cards, that can be problematic - potentially causing you to buy when you otherwise wouldn't (not recommended). That's why it's suggested to keep general-purpose CC's like MC, Visa, Amex and Disco. They can be used at a variety of merchants to purchase things you need to buy anyway, like gas and food.You're actually a great test case, having no derogatory data on your CR. You could play around with a simulator (one of the monitoring services has one) and see what will happen before you take action. Or you could experiment and take the plunge yourself if you are not looking to finance a major purchase or change insurance carriers soon. Whatever you choose to do, we would love to hear the results. Emphirical evidence helps all of us and adds to published information. Link to comment Share on other sites More sharing options...
aunieandreg Posted January 22, 2008 Report Share Posted January 22, 2008 I disagree on paying the highest off first. I read it works better to pay the lowest off first and transfer thier monies to each account in order of low amount until they are pd off and you are left with just your 1 or 2 larger amount CC. It gives you a sense of accomplishiment. Also thats one less bill you have to pay each month.your headed in the right direction just find your groove and work it. Link to comment Share on other sites More sharing options...
goose Posted January 22, 2008 Author Report Share Posted January 22, 2008 The score that is damaged by closing all of the accounts would be the score that is used to open new cards...SO if we DID close all the cards (against advice!) how long does it take your score to rebound from something like that?I really appreciate your patience and help! Link to comment Share on other sites More sharing options...
goose Posted January 22, 2008 Author Report Share Posted January 22, 2008 I will definitely keep posted on the effects of us closing accounts.Thanks! Link to comment Share on other sites More sharing options...
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