In early March I got a Orchard (400) and Credit one(200). But know I have gotten WaMu for 2,000 and a Credit Union Visa for 1,500. Is it to early to close the Orchard and Credit one? Will that look bad or lower my scores? Should I just pay them off and sock drawer the until next March then close? Thanks
It's always better to put the card in mothballs, then to CLOSE the account. If you close it, it won't HELP your credit report; and in some cases it could HURT your credit report.
Agree with jam completely on this. Not sure why people want to close accounts, take them out of the FICO scoring system, when FICO values age so much. Sockdrawer the card unless you have a lot of other, similar age cards with similar histories. AND they are charging large fees just to keep the card open. Any other situations, leave the card open.
Just out of curiosity, wouldn't it be actually better as far as the score is concerned to close those NON-MATURED, low limit cc's opened March if haybreez opened new, larger cc's with WaMu and CU this APRIL, only a month after? Don't they also consider average age of all accounts in determining FICO score? If so, those two smaller, immature cc's should hurt the score as well as the newer ones especially in short term and accordingly closing out those would make average age look older, I would guess. Critique me...... Maybe opening a new account and closing right next month could look worse.
FICO is far too complex to say definitively on all these variables. You have offered too many options above, too many variables. But part of the issue is the cost of the secured cards. If someone just paid a couple of yearly fees for secured cards, part of the equation would probably be the cost already paid. But if FICO were more important than money, which it might be, then a brand new set of cards could offset those opened a few months ago. Average age is one of the FICO variables, yes. Thed limits of the cards would not make as much a difference to FICO as it would to future creditors. FICO cares more about utilization, and yet the future creditors would look at their probable credit limit differently if someone had a $10,000 WAMU CC showing v only a $300 Orchard card. So the answer depends on the specific question. FICO only, or the chances of getting a higher limit card AFTER WAMU and CU begin showing.
The best way to accommodate the fees and interest is to set auto-bill-pay to pay 1/12ths of the annual fees monthly, even if you're not using the account. You'll want to round that up to account for possible increases in the amounts.
Simple answer: If you have an older, "open" account then close the HSBC and Credit One. You may lose a marginal amount of points but so what . . . are you in the market for a mortgage or auto loan? If so, then don't mess with just yet because every point is precious. Otherwise, save your money that you would have wasted on the annual fees. FICO scores are meaningless unless you are planning on using them for something. Too many people get hung-up on this fickle, intangible item.
