I recently completed a new refi of my home, and was able to get a large HELOC at <6% which I have used to pay off my credit cards, which were averaging 24%. I have now paid them all off completely, which leaves me with the following cards and limits: Citibank Aadvantage $14K limit, $0 balance, 26.49% MBNA World Card $25K limit, $0 Balance, 19.99% Discover $11K limit, $0 balance, 12.47% Chase Visa $30K limit, $0 balance, 24.99% Chase Ultimate $18K limit, $0 balance, 16.74% GMCard (Household) $15K limit, $0 bal, $23.99% BofA $1K limit, $0 balance, 12.9% Amex Platinum, Gold and Blue $0 balances Now that they are paid off, I assume there is a better chance of negotiating the rates down (I was able to do this with Discover already, who reduced the rate from 24% to 12.74 when I called). I know I have too many cards, but I would prefer to keep them open since it will help my score to have that much availability while the HELOC is near capacity. Advice would be great!
I've never actually been in this situation, but I think this is what I'd do. Call each credit card issuer and tell them that you've recently paid off all of your cards and you are now going through a decision process of what to keep and what to cancel. Tell them that their interest rates is very high, and you're interested in whether or not they can offer any better terms. Chat with the customer service rep, be friendly, you're just trying to compile some information. Ask them what the best deal they can offer you is. If the card has an annual fee, they may offer to waive that. If they ask if you want to cancel, tell them not yet, you have to evaluate all the alternatives. If they lower the rate, I think I'd charge at least something, like gas or groceries, that you can pay off every month. That way at least you're giving them some business. Keep all the cards active if you want to keep them open for ratios. But carry the balance where you get the best rate.
As your new balances start posting to your credit report, you will start getting better offers, as well as better balance transfer offers, assuming your record is otherwise good (paid as agreed). Selectively choose who you want to do future business with, either based on calling them as above, or based on the offers you get. Grow your account limits over time, based on the quality of their offers.
