Close or ignore inactive credit cards?

[boosami]

I have 25+ credit accounts, many of which I have had for 5 or more years. I have always been told to keep my zero balance cards open because of credit history and debt utilization ratios. Should I close some or all of the inactive accounts?

I only use a few cards:

• Platinum Amex charge card - Used for all possible purchases - Paid in full each month

• Chase Rewards Plus Visa - Used places that don't accept Amex - Paid in full each month

• Retail Cards - 4 retail store accounts I use for 0% financing deals only - Paid in full before accuring any interest

The card with the longest history (Amex) I still actively use each month. One concern I have is over my debt utilization ratio. My Amex card is no limit, so I don't think it adds into the available credit on my credit report. If I have my 0% financing cards charged up, I don't want my utliziation ratio to be high. Should I keep some other zero balance accounts around to buffer my debt utilization?

[Ima saver]

Personally, I keep all of my cards. I just have them put away and do not use any but one of them. I never close them.

[PrincessPerky]

If you are plannin gon taking out a loan, then keeping some is important, if not I don't think it is, but then I am too lazy to close any of ours.

[ActYourWage]

Close 'em

[maat55]

I'm a big believer in managing my own money and not letting fico do it. If you want to close them, I would close them. Two cards are plenty.

[atomicrc11]

As for your Amex, it does figure into your credit report if it has no limit. The limit is reported as the highest month ending balance you have had. This can hurt you. For example, take your card with no limit. Say your max month ending balance was $500. Every month thereafter you charge $400 to the card. Your limit looks like it is $500 because that is the highest Amex reported to the credit bureau, so it looks like your card is 80% utilized every month. This is why I don't like charge cards or no limit cards. Capital one used to do this as well as they never reported your limit to the credit bureaus. Capital One has changed their practice recently.

[Joan.of.the.Arch]

atomicrc11, that sounds like urban myth. Where did you learn that?

[MiikeB]

Seems to me it would be a hassle to go through 25 statements a month to make sure no one is making charges on those cards or that some annual fee wasn't announced.

[lexi_kaye]

Unless you are being denied credit because you have "too much available credit", I would keep the cards open. Longevity is a part of your credit score and also the amount of credit you use to the amount of credit available to you is also. Unless of course, you are tempted to use them, then freeze them or cut up the cards or put them in a safe deposit box.

[boosami]

Is that true about the no-limit cards?

On my credit report the "Limit" field for my Amex account is blank (unreported?). It does have a value in the "High Balance" field, but it's much higher than my average monthly spending (10x higher). That's due to some huge purchases during a billing period like paying my income tax and property taxes, or a big downpayment through my Amex. Is the "High Balance" used as my supposed limit in this case?

I am not worried about spending on my open account, nor identity theft. I simply want to know if it would make me more attractive to lenders by closing the superflous ones.

Does it factor into your credit score or a lender's decision how much "potential" debt you could have? Has anyone ever been denied a loan because they have too much available for immediate credit?

[Joan.of.the.Arch]

Boosami, I've heard of people owning dozens of cards and even taking out cash loans on them to invest and then repay before interest charged on the CC loan goes up.

I guess criteria for singing contracts for CC could change at any time, so that even if this month you could get approved for ten more cards, maybe next month, things would change and you could not even get one more... All at the discretion and formulae of the CC companies and issuing banks. In the UK a couple months ago, hundreds of thousands of people who paid off their accounts on a certain card monthly (never carried over a balance), found their cards cancelled. Good payers--no profit.

[atomicrc11]

It may have changed, but no limit cards definitely don't show a limit on your credit report. I have an old report from a few years ago that says the limit on my Amex Corporate card is $537. It can't be since it is a no limit card.

[cptacek]

I'm a big believer in managing my own money and not letting fico do it.

Agree!