Ok, here is my situation with all my cards. I want to know from all of you what I should do! I currently hold 8 credit cards. I just called to cancel my Sears card, because I never used it. Here is the list of cards, w/ interest rates and credit limits. *Chase Platinum Mastercard, Opened 7/01, 2.99% until January 2002, then 14.24%, $8500 limit *Bank of America Platinum Visa, Opened 7/01, 19.99% rate, $6000 limit *Direct Merchants Bank Rate Rewards Titanium Mastercard, Opened 6/01, 18.49% rate, $3500 limit *Nextcard Standard Visa, Opened 6/01, 12.99% rate until Oct. 01, then 21.49%, $2000 limit *Target Guest Card, Opened 6/01, 20.49% rate, $300 limit *Cedar Falls Community Credit Union Visa, Opened 01/01', 11.49%, $500 limit *Capital One Visa, Opened 08/00', 14.77% rate, $700 limit *Iowa Community Visa, Opened 07/00', 11.49% rate, $300 limit Which cards should go. I would like to have only 2 cards, and I like the benefits of the plat. I just need some help, and anyone that could detail my situation, I would appreciate it. I know I have WAY too much available credit right now, and if I applied for a loan, I would definitely be denied, because of too many open accounts, too many recently opened accounts, and too much available credit. So, let me know what should stay and what should go. I appreciate any help. Thanks! -Matty
Keep: Iowa Comm-oldest account and low interest rate. Chase Platinum-high limit and pretty good interest rate. Target-need a dept. store card What are you scores???
Several years ago I had a lost card which spooked me. I also had another woman's credit showing on my Experian report. So, what did I do? I closed all my accounts but one thinking that was a responsible and safe thing to do. I eventually opened one more later. It was a very, very bad move. Pay off all you won't be using, stick them in a drawer or freeze them in an ice cube drawer, heck, even cut them up if you like...but DON'T close them officially. If you ever have occasion to use any of your credit your ratios will nail you...you will end up with your limits lowered and your rates jacked up. Those other cards are your leverage, not only to prevent the aforementioned but also to use to negotiate lower APR's in the future with your cards. You have to have and keep the additional credit to play one off against the other. That's my opinion... any others differ?...
That makes sense, but the loan clerk at the local credit union said that if you have a lot of availiable credit, it looks bad to them, and could result in a denied loan. Basically, she said through their eyes, that if you have all that credit available, you could, in essence go out and charge up a large amount of money and put yourself so far into debt that you wouldn't be able to make your mortgage or vehicle payment. I probably will keep one visa, one mastercard, and the target card. Any other opinions on this subject? i'd like all the feedback I can get.
I agree with Mist. I wouldn't close any (unless of course they charge annual fees). I would get rid of any that charge an annual fee. I wouldn't close them because of what Mist said. Having the available credit protects your balance/limit ratio should you decide to use your accounts. Keep in mind that even if you pay your balances every month, you statement balance will be reported to the CRA and it will look like you carry a balance (George has been complaining about this with his Discover card). That balance/limit ratio is a very large part of your score, and you don't want that ratio to get very high. It is not the balance you actually carry that gets calculated into the ratio, but the balance that is reported to the CRA. Also, keep in mind that if you close any of the older accounts (not that any of them are real old), your average age of accounts will decrease, and so will your score.
What about the terms to the loan officer? Wouldn't they freak when they see that you have all that availiable credit just sitting there, for you to easily use anytime?
Depending on your income, it really isn't that much credit. Your current scores are not that bad. Once these accounts age, your scores will pop back up. When the accounts are less than 6 months, they actually bring your score down, as will in inquiries added to obtain these accounts. I would give everything time. Wait until your accounts are all at least 6 months, then re-check your scores. If your not happy with your scores at that time, then re-consider what direction you want to take. What kind of loan was the loan officer referring to, a home loan, auto, ...?
If you really want to get rid of a couple, here is what I would do: *Chase Platinum Mastercard, Opened 7/01, 2.99% until January 2002, then 14.24%, $8500 limit --Keep this one, decent interest rate, decent limit, good bank *Bank of America Platinum Visa, Opened 7/01, 19.99% rate, $6000 limit --Keep this one, rate stinks, ok limit, good bank, work on lowering that rate. *Direct Merchants Bank Rate Rewards Titanium Mastercard, Opened 6/01, 18.49% rate, $3500 limit --Close this one, too many bad stories about DMB, interest rate stinks, limit not so great. *Nextcard Standard Visa, Opened 6/01, 12.99% rate until Oct. 01, then 21.49%, $2000 limit --Close this one, too many bad stories about Nextcard (including one you posted about that $15 dollar charge), interest rate stinks, limit low. *Target Guest Card, Opened 6/01, 20.49% rate, $300 limit --Keep this one so that you have a retail card, supposedly needed for the right "mix" *Cedar Falls Community Credit Union Visa, Opened 01/01', 11.49%, $500 limit -- Close this one, what are you going to do with a $500 limit? *Capital One Visa, Opened 08/00', 14.77% rate, $700 limit -- Keep this one, try to get better rate and limit increases. If you keep both of the ones opened in 7/01 open, I would keep both of the oldest accounts to help keep a higher average age of accounts. *Iowa Community Visa, Opened 07/00', 11.49% rate, $300 limit -- Keep this one, again, try to get a higher limit. Also, again if you keep both of the ones opened in 7/01 open, I would keep both of the oldest accounts to help keep a higher average age of accounts. I know that is 1 store card and 4 major cc's, but it is a start. You could re-evaluate again further down the road after you know which companies will work with you on the limit and interest rates.
*Bank of America Platinum Visa, Opened 7/01, 19.99% rate, $6000 limit --Keep this one, rate stinks, ok limit, good bank, work on lowering that rate. ---------------------------------------------------------------------------- IF YOU CAN, ASK FOR THE 8.90% FIXED BALANCE TRANSFER RATE... And DON'T use the card to but ANYTHING!!!
Again, keep them all, ESPECIALLY the oldest one because that is valuable even if you can't do anything with a measly $500.00 limit. It can work for you in other ways. Second, don't listen to the loan lady at your CU. They will more than likely give you the loan with what you have. It is not that much, as someone else stated. They could say that to everyone or have the motive that if you unknowingly tank your score by doing what she says you will have no choice but to come to them in the future at which time they'll charge you higher interest rates than you otherwise would have had because now your ratios are messed up. Mortgage brokers tell you the same thing. They are full of it. Their underwriters are not going to dismiss the deal because of too much credit. If you have been, and continue to be, responsible with it you won't have a problem. Just my 2c from experience.
Keep these: *Chase Platinum Mastercard, Opened 7/01, 2.99% until January 2002, then 14.24%, $8500 limit *Bank of America Platinum Visa, Opened 7/01, 19.99% rate, $6000 limit Maybe keep this: *Direct Merchants Bank Rate Rewards Titanium Mastercard, Opened 6/01, 18.49% rate, $3500 limit Definitely dump Nextcard, they suck.
*Nextcard Standard Visa, Opened 6/01, 12.99% rate until Oct. 01, then 21.49%, $2000 limit --Close this one, too many bad stories about Nextcard (including one you posted about that $15 dollar charge), interest rate stinks, limit low. ------------------------------------------------------------------------------------- I see you have another unadvertised rate...12.99% then 21.49%... THE ONLY RATES THEY ADVERTISE ARE 9.99% FIXED OR 2.99% WITH A "GO-TO" 9.99% THEY EXPECT MY WIFE TO TAKE 9.99% FOR 3 MONTHS...THEN AN UNADVERTISED 18.99%...IF SHE CLOSES THE ACCOUNT IT GOES TO 19.99%... 1/3 OF BALANCE IS ALREADY IN THE MAIL...OTHER 2/3 BY THE 15th... LOSE~LOSE
I haven't been happy with Nextcard. I was expecting a good rate when I applied too, but I got screwed by them! Out of ALL the cards I've had, the NextCard was the Second Highest, only the GetSmart Visa Classic I canceled (23.99%) was higher. I think Direct Merchants Bank should be had away with too, because a lot of people have had bad experiences with the. Some people here are saying not to close the accounts, while others say its ok. Does it make your credit look bad if you close a mass of accounts in a set period of time. My objective in doing this is to chiefly eliminate the gigantic amount of availiable credit I have. Even if I keep the Plat cards w/ $6000 and $8500 limits, I think my ratios would be ok, because I would probably charge at most $500 to each card at a time. Usually, the charges are no more than $100 a month. Let me know what ya'll think.
First of all I think your "objective" is misguided. I wish someone had told me what I'm telling you but if you don't want to listen, so be it. The other thing is that you say "I would probably charge at most $500 to each card at a time...". That's fine if you really think you can "guarantee" yourself that. What happens when it's X-mas, your transmission goes, and you have to have an emergency root canal that your insurance doesn't cover? All of this happens in the same month. Sure, you've got a CD you can cash in next month to pay for it all but guess what? For that ONE month your ratios are tanked and all of your creditors who have been doing Account Reviews on your credit bureau profiles looking for just such a scenario, pounce on you. Next thing you know, your limits are reduced to below their current balances effectively cutting you off from ALL access to credit, and your interest rate is jacked up to twice or three times it's original amount. Now, because of this you won't be able to "get" any new cards to recover from the situation. Your "probably" attitude may get you into some very big trouble down the road. I'm just trying to save you from yourself and maybe a few others who might happen upon this thread.
You've gotten some good advice here. I recently talked with a very knowledgable mortgage broker and he recommended doing exactly what "the other" said on this post. Closing the number of accounts (especially new, smaller ones) will make you more of the "model" of the credit scores: result will be a higher score within 3 months or so and then prime cards with better rates and limits. Clearly, this year you had a major change! Employment? Credit? Your card differences this year are dramatic. Based on your best 2 cards, you're now prime. Think of yourself as such. I agree with "the other's" strategy. Keep the 2 best, and the 2 oldest. Close the rest. Chase and BA are great!!! use them. Once you close the rest and you've made sure your reports show them closed, call Cap1 and Iowa Community Visa and work on limits and terms. With those 4 cards and Target you're close to the perfect mix. In 2 years or so if Iowa is still low, cancel it. Cap1 will increase you (and you can use the Exec office to get a nice bump now) if you want. With those 5 cards, you're perfect. You'll get most anything you want. Keep your ratios under 25% and you'll max your score. Congrats on being able to dump your rebuilder cards.
Oh, also regarding "closing them all at once". You'll actually get a great score bump. Definitely do them all at once. Don't apply for a thing for 3 mos, wait for it all to hit the bureaus, and laugh as your score skyrockets
Marie, Your advice may be right for someone applying for a mortgage. Mortgage lenders use decidedly different loan qualifying models. If someone has no plans of a mortgage in the near future their best bet is to put a few of them away, out of reach and out of mind, with zero balances and only "use" one or two. Let the others age for awhile, occassionally calling to inquire about better terms and higher limits and then reassess prior to looking into home ownership.
You do have a point, and that is an approximation. If all those things happened, I am sure the Platinum cards are there to help me, and I have a good savings account to back me. I will take the advice of keeping the 2 platinums open, Iowa Community Visa, Capital One, and Target open. I appreciate all the advice, and you sound like a very knowledgeable person of the credit field.
