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Old 07-31-2016, 12:13 PM
 
4 posts, read 2,250 times
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I have multiple credit cards, and have paid off the highest-interest rate ones, and want to cancel a few of them. I'll just say overall that I have more than 6 but less than a dozen (though some are store-specific cards).

I've heard that you shouldn't just close every account you pay off, but ideally I'd like to have just 2 remaining (maybe 4 for emergency or vacations or something), so is there a sweet spot for open accounts? Can I safely close maybe 2-4 and not have it negatively affect my credit rating? Note: it will cause my debt-to-credit percentage to go up, which is currently >50%, so should I wait and pay that down first?
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Old 07-31-2016, 12:21 PM
 
Location: Atlanta, GA (Sandy Springs)
3,528 posts, read 2,302,170 times
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You should not cancel ANY cards if you are carrying ANY balance of credit card debt. Otherwise your score will take a hit.

Once you have paid off ALL cc debt, you can cancel as many as you like with no negative impact.
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Old 07-31-2016, 12:33 PM
 
Location: New York
1,096 posts, read 897,406 times
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Are you looking to borrow any money soon? Like a mortgage? If So I would leave them all open. If you have a few with low limits you can close them with little affect on credit. If you close a card with a 20K limit that will affect your debt to credit ratio for sure.

Honestly you dont really care too much about your credit score...cancel whatever you want. Most imporantly will be length of credit history and on time payments.
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Old 07-31-2016, 12:38 PM
 
Location: Atlanta, GA (Sandy Springs)
3,528 posts, read 2,302,170 times
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Quote:
Originally Posted by jms493 View Post
Are you looking to borrow any money soon? Like a mortgage? If So I would leave them all open. If you have a few with low limits you can close them with little affect on credit. If you close a card with a 20K limit that will affect your debt to credit ratio for sure.

Honestly you dont really care too much about your credit score...cancel whatever you want. Most imporantly will be length of credit history and on time payments.
FALSE. Utterly wrong advice.

He has credit card debt. Cancelling any cards is a bad idea since as he stated, it will cause his revolving usage percentage to go up, and this makes up 30% of your score.

If he's looking to get a mortgage then cancelling any of them would be even dumber.
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Old 07-31-2016, 12:41 PM
 
Location: Kansas/China
4,530 posts, read 2,301,265 times
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Quote:
Originally Posted by atltechdude View Post
You should not cancel ANY cards if you are carrying ANY balance of credit card debt. Otherwise your score will take a hit.

Once you have paid off ALL cc debt, you can cancel as many as you like with no negative impact.
Really? I didn't know that.


Say I have 2 credit cards. Credit card A has a balance, card B has no balance and is currently paid off. If I cancel B, that will affect my credit score?
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Old 07-31-2016, 12:42 PM
 
Location: Atlanta, GA (Sandy Springs)
3,528 posts, read 2,302,170 times
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Quote:
Originally Posted by Mattks View Post
Really? I didn't know that.


Say I have 2 credit cards. Credit card A has a balance, card B has no balance and is currently paid off. If I cancel B, that will affect my credit score?
Yes it will be a negative hit on your score because your revolving debt usage percentage makes up 30% of your score. Only when you have zero cc debt (so the usage percentage is zero) can you cancel cards without any negative impact. If you have any cc debt then removing available credit (by canceling cards) will cause your usage percentage to rise and your score to go down.
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Old 07-31-2016, 12:43 PM
 
Location: Sugarmill Woods , FL
6,235 posts, read 5,386,899 times
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No advantage to canceling cards.
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Old 07-31-2016, 12:54 PM
 
17,615 posts, read 12,203,533 times
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Quote:
Originally Posted by atltechdude View Post
You should not cancel ANY cards if you are carrying ANY balance of credit card debt. Otherwise your score will take a hit.

Once you have paid off ALL cc debt, you can cancel as many as you like with no negative impact.


Well that's not true because number of accounts and average length of having the accounts are both factors which both can be hurt by canceling cards
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Old 07-31-2016, 12:55 PM
 
17,615 posts, read 12,203,533 times
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If cancel a card if the cost of the card outweighed the benefits I received, if the card had no fee I'd never cancel
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Old 07-31-2016, 12:55 PM
 
Location: Kansas/China
4,530 posts, read 2,301,265 times
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Quote:
Originally Posted by atltechdude View Post
Yes it will be a negative hit on your score because your revolving debt usage percentage makes up 30% of your score. Only when you have zero cc debt (so the usage percentage is zero) can you cancel cards without any negative impact. If you have any cc debt then removing available credit (by canceling cards) will cause your usage percentage to rise and your score to go down.
Thanks, that is a great thing to know. I had no idea they calculated from total usage. I always assumed each card was calculated separately.


Now, for an example pertaining more to me. I have 4 cards, none of them run a balance. Say I want to cancel one card because they implement an annual fee. So I cancel that card, what type of effect will that have on my score? Does cancelling any card, at any time basically have a negative effect? But the negative effect on the credit score just fluctuates with whatever the total debt percentage is?


This is actually a scenario from a few years ago, but I'm curious what I did without realizing it. I have a pretty good credit score, around 790 or thereabouts.
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