After having been mostly in the credit card accumulation mode for years, it seems that the time to cut down my “holdings” has finally come. The main reason that I probably will never use some of the cards again because they don’t offer any reward that’s better than those cards I am actively using now. In addition, a few cards from Citi and Chase have been closed by the issuers due to inactivity for a long time. So instead of waiting for the banks to close the accounts for me, I think it’s better for me to do the cleaning myself. Cards that were closed recently include:
JC Penny MasterCard (opened in 2002 as a store card)
Lows MasterCard (opened in 2004 as a store card)
Bank of America AAA Visa Card (opened in 2002), WorldPoint MasterCard (opened in 2002)
Citi Driver’s Edge Card (opened in 2008)
Discover Miles Card (opened in 2006)
Chase Rewards MasterCard (opened in 2003)
Citi Dividend MasterCard (opened in 2004)
Some cards were opened years ago as store credit cards, but later they also become credit cards bearing MasterCard or Visa logo, others were opened for balance transfer only but never got canceled after the promotion was over. With nothing attractive to me now, there’s no reason for me to keep them. However, I didn’t just close the cards. For those I have other cards with the same issuers, I always asked for credit line consolidation to move credit limits to a surviving card. This way, I won’t lose the overall available credit after closing the accounts and the credit utilization ratio (total balance divides total credit) will not increase. For those store cards, I just closed them because the credit lines are very low anyway (usually a couple of thousands).
After closing the above accounts, the total number of credit cards I own have reached a reasonable number and each of them has its own purpose:
American Express: Optima Card (opened in 1998, $10,000 CL, oldest card, not actively using), TrueEarningots Card (opened in 1998, $29,200 CL, for shopping at Costco);
Bank of America: UPromise MasterCard (opened in 2002, $46,700 CL, for shopping online through UPromise);
Chase: Amazon Visa Card (opened 2006, $11,000 CL, for shopping at Amazon.com to earn 3% cashback), Freedom Visa Card (opened in 2007, $49,150 CL, for shopping at grocery stores and gas stations to earn 3% cashback), Sony Visa Card (opened in 2000, $6,000 CL, old card, not actively using);
As you can see, I am careful not to close those old accounts which have a big role in determining the length of my credit history, even though I am not actively using them (I don’t however have to use them at least once every year or two to prevent them from being closed by the issuers). By keeping some old cards and preserving credit limits, I am trying to minimize the negative impact on my credit score.
Have you voluntarily closed any credit cards lately? If so, anythng special have you done so it won’t hurt your score?
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