Thinking of closing dept. store credit cards.

karenkc · #1 (**permalink**) 10-16-2009, 05:18 PM

Will this lower my credit score, or are department store credit cards not as big of a factor in the score compared to VS/MS/etc.?

Aside from that, how much does it lower your credit score to close Visa/Mastercard, etc.? I would like to close everything except one card for emergencies.

lovcom · #2 (**permalink**) 10-16-2009, 08:51 PM

Closing any credit card will temporarily lower one's score. But since the hit is temporary, I'd suggest you close all your department store accounts because they charge huge interest rates. I'd stick with two or three visas or MC's, and pay them off every month.

BillK · #3 (**permalink**) 10-17-2009, 10:10 AM

Most lenders want to see three forms of credit obtained. If these are your only cards and they are no costing you an fees, then it may not be the best idea.

However, if you have other general cards available with no annual fee and a grace period to pay off with out interest, then it is a good idea.

To many credit cards actually can hurt your score because of the available debt you could obtain in a short period of time. You may actually raise your credit score by getting rid of excess cards. The key is to have a balance of cards in your possession.

karenkc · #4 (**permalink**) 10-17-2009, 05:35 PM

duplicate post

karenkc · #5 (**permalink**) 10-17-2009, 05:36 PM

Quote:

Originally Posted by BillK

To many credit cards actually can hurt your score because of the available debt you could obtain in a short period of time. You may actually raise your credit score by getting rid of excess cards. The key is to have a balance of cards in your possession.

Thanks for the replies. I closed 7 dept store credit cards yesterday that had 0 balances and one of my Visa cards raised my limit by 2k the same day. So perhaps this was due to closing the cards. Anyway I called my visa and had them lower my limit to what it had been.

disneysteve · #6 (**permalink**) 10-17-2009, 07:04 PM

Quote:

Originally Posted by karenkc

Thanks for the replies. I closed 7 dept store credit cards yesterday that had 0 balances and one of my Visa cards raised my limit by 2k the same day. So perhaps this was due to closing the cards. Anyway I called my visa and had them lower my limit to what it had been.

The increased Visa limit was surely a coincidence. They wouldn't have known yet about closing the other accounts.

Why did you request a lower limit? Generally, a higher limit is more advantageous since it makes your utilization ratio lower. You never want to charge more than 30% of your available limit, so $5,000 limit means you should never charge more than $1,500. I've read several articles recently suggesting that ideally you should keep your charges to no more than 10% of your limit, or $500 or a $5,000 card.

EconoMutt · #7 (**permalink**) 10-19-2009, 06:59 AM

Quote:

Originally Posted by karenkc

Will this lower my credit score, or are department store credit cards not as big of a factor in the score compared to VS/MS/etc.?

Aside from that, how much does it lower your credit score to close Visa/Mastercard, etc.? I would like to close everything except one card for emergencies.

It knocked about 30 points off my FICO score.