I've got 16 CC's. Was shopping around and ended up applying for about 14 CC's in the past month (already had two). Took alot of hits to my credit report (didn't understand potential impact at that time), but FICO still pretty high. I want to get my cards down to no more than 6. Don't need other loans (car or house) for another two years, in fact looking at this from the long view and attempting to apply some kind of strategy starting now. Should I close all these new accounts (no activity on them at all) at one time or do three at a time? or something like that? I'm anxious to get ride of them because I already no whether open or closed they'll show on my credit report for a number of years. I love to make them disappear from my credit report somehow but don't think that could be done. Suggestions on best strategies for reducing my cards, specifically when do at get rid of them and how many at a time? I assumme I should write the CC's companies letters when I close them, what MUST I say? Thanks
Some people have said that you should close no more than 3 per year. What I would do is make a chart of ALL your cards... INTEREST RATE ANNUAL FEE CREDIT LINE, ETC. PUT THE LOWEST INTEREST RATE, LOWEST FEE, AND HIGHEST CREDIT LIMIT AT TOP OF PAGE. AS YOU GO DOWN THE PAGE THEY GET LESS IMPORTANT TO KEEP. DUMP THE LAST 3 ON THE PAGE LIKE A $200 CREDIT LIMIT ~ $36.00 ANNUAL FEE ~ 22.49% INTEREST RATE... You can also PLAY one card against another if you want... Tell the card company you have higher limits, no annual fee, lower interest rates...
Having 6 or 8 credit cards is the best way to go because they will build your credit while making you good money if you go at it right. Here is how to do that. Open a savings account at a bank. One that has full online services for free with no minimum balance is best. Those are very hard to find, or at least they have been for me so far. I have been using Compubank for a long time, but they just sold out to netbank and I'm not all that happy with what I see there as of yet, so am looing for a new banking home. You use 1 card for a week only, buying everything that you possibly can on it such as your groceries, gasoline, utilities, whatever you would normally buy if you had the cash to buy or pay for it with, and only under those circumstances. Credit cards are not meant to be used as long term loans although the CCs love to have you do that. If at all possible, you should have opened your savings account with almost every dollar that you have. You should also have the cards sorted by due date so that you are always using the card with the due date that is the furtherest away into the future. At the end of the 1st week, retire the card you were using and do not use it again until you have come to the end of the month, then start over using the same rotation. One card per week. What you will be doing is drawing interest on the money you have already spent, and over a sufficient period of time, you will end up a wealthy person. Once your interest builds up to the point where you always have a positive balance of more than $100 then you should move the money to a good mutual fund. I like Twentieth Century's growth fund in Kansas City. I have been told that there are many more out there that are better, and that's probably true, but I've been using them for so long that I'm not going to change now. I like the fact that I can switch my funds from mutual funds to money market funds to bond funds anytime I like. I do that every few years according to a specific formula which demands that I watch the prime rate very closely. In the event that the prime should rise above say 10 to 12 percent, I switch to money market funds unless the prime goes even much higher than that in which case it's time to go to the bond funds. When the interest rates come back down to about 8 or 9 percent, it's time to move back to the mutuals again because a major bull market is surely afoot. I normally expect to earn between 10% up to as much as 25% on my money, depending on how the markets go. Last time I switched from the bond funds to the mutual funds, the market was at 745. Today, it's well over 9 to 10 thousand. Nice ride to say the least, and although there is apparently a short term bear market in swing right now and will most likely continue until the fall or later due to the elections and the present economic situations, I think it will come back solidly and with a roar as soon as the major players figure out what Dubyu is going to do and what his policies will be. Hope my comments help you make a better decision than getting rid of a very valuable asset. Bill Bauer
LizardKing The limits on the two cards I had were: Discover $1,000 Visa(credit union) $1,000 I've had both of these accounts for one year. The new cards are started coming in this January with Providian and AmEx (charge); all other cards came beginning last month. I was shopping around for rates and didn't realized there were implications/impact for appling for cards and having them on your credit record until I stumbled onto this website New Cards are: Citibank Platinum Select $6,000 Juniper MasterCard $12,000 Discover Platinum $ 6,000 Providian (Visa) $3,000 First USA (Visa) $5,000 AmEx (Optima) $2,000 AmEx (Charge Card) MBNA (Visa) approved but Limit not yet determined Bank of America (Visa) $3,000 Fleet/Fusion (Visa) $2,000 AT&T Universal (Visa) $5,000 CitiBank (MasterCard) $3,000 AmEx (Blue) approved but Limit not yet determined Any concrete suggestions on how I can close most of these accounts in the short term. I think they'll stay on my record for quite a few years. What strategies would you use to close them, like how many would you close at a time, what would you say in a letter to the credit card companies, and finally is there any chance since i'd be closing most of them without ever using them that I could get them taking off my credit report. Currently my credit is excellent, and I'm simply trying to make sure when I need to go for a house loan in about two years I won't have any problems. Suggestions?
George--thanks for the advice. I already know which cards I definitely want to get rid of: Providian and First USA are at the top of the list to get rid of, based on much of what I've read here. The lowest credit limit Citibank I also want to get rid of. Also AmEx (charge) & Optima are cards I'd like to keep but see no reason to given the the charge card has an annual fee, and with Blue the Optima seems like it is a duplicate. I will keep Optima for five more months because they gave me a intro APR of 0% for five or six billing cycles. I want to keep my original Discover & Visa cards because those are my oldest lines. I'll figure the rest out as I go. I'd just like to know when and how many at a time to get rid of, and how (what do I say in a letter to the credit card companies) and is there any chance of writing the CRA's and having them remove accounts that I've closed and never used? Bill--thanks for the info, but I'm really not looking to make money but rather just the get rid of some cards. Thanks again.
Lizard King Thanks again. I will do that, but does it matter how many cards I get rid of at one time? And Do I need to say specific things in my letter closing the account to the credit card companies. Thanks to all by the way, as stumbling onto this site has been a tremendous help to me. I've become very conscious of these issues thanks to all you folks. Didn't even know this site existed before a day or so ago.
ONCE CARDS ARE ON THE CREDIT REPORT...they (the credit reporting agencies) won't remove them, even if you NEVER used them. They will stay on for seven years. I don't know for a fact...but it sounds logical that if you closed a lot of accounts (MORE THAN THREE IN ONE YEAR), it could hurt your F.I.C.O. YOU CAN CLOSE ACCOUNTS ON THE 800# Or just write them at the "DISPUTE CHARGE ADDRESS" (NOT PAYMENT ADDRESS) and tell them to close the account because the: interest rate is too high credit line too low annual fee too high CUT THE CARD IN HALF AND TAPE IT TO THE BOTTOM OF THE LETTER. TELL THEM TO REPORT "ACCOUNT CLOSED BY CONSUMER" NEVER LATE BALANCE $0 GOOD LUCK
CLOSED BY CREDIT GRANTOR MEANS THEY CLOSED IT BECAUSE YOU WERE BAD!!! I WOULD KEEP ONE AMEX...JUST BECAUSE IT IS AMEX...
Re: Closing Accounts Some credit cards don't show up on your credit reports until you actually use them. My Chevron card still hasn't shown up on my credit reports after 8 months, simply because I've never used it. You should avoid using the cards you want to close anyway, and hope for the best when you finally close them. It's also possible that quick closures, before you ever receive the cards, could nullify some of the accounts and leave no paper trail (on your credit reports.) Best wishes to you, along with some good-natured jealousy.
