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Originally Posted by moni727
From my understanding, having too many CC accounts open (more than five) can negitavely affect your credit score, even if they have a zero balance.
The theory is that it is possible for you to max all of those cards out if you so chose, and so all of your open credit is taken into consideration when determining your score.
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5 credit card accounts is by no means too many. Personally, I have over 20 credit card accounts (all with no balance), probably around half a million in available credit, and my FICO is superb. FICO does not punish you for having lots of available credit, or lots of accounts. It is simply not a factor they use when calculating your credit score.
Quote:
Originally Posted by moni727
Also, closing CC negatively affects your score. Not by much, only a few points.
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This is another misconception... The act of closing an account is not what harms your score. If the closed account causes your ratio of debt to available credit to go up, it might hurt your score. Closed accounts stay on your report for 10 years, too, so you don't lose that history immediately and that won't hurt you. If you have lots of accounts or little debt and close a few cards, it most likely won't affect your score at all. Unless there's an annual fee, most people don't close accounts because there's really no reason to do so.
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The only thing you want to watch out for when applying for cards to get deals is that you don't apply for too many in too short a period. You are best limiting it to one a year, or if that's not enough for you one every 6 months. If you are thinking of applying for a loan or anything major, don't apply for any other credit for a year prior if possible to ensure the best FICO score on your loan application.