Multiple Credit Cards

**disneysteve** · 03-16-2011, 05:48 AM

Why are you keeping the PNC card with the low limit and no rewards? If you could find an intelligent rep at PNC, you might be able to close the $2,000 card and have them transfer that limit over to the $7,900 card, giving you one PNC card with a $9,900 limit instead.

Do either of the rewards cards have annual fees? If so, do you get something in return for those fees that makes them worth it?

Canceling a card does ding your credit score, but only temporarily. Over time, that recovers. So I wouldn't keep a bad card just for that reason.

Using the card monthly for a couple of recurrent charges is fine and might help matters.

**herdjohnson** · 03-16-2011, 05:53 AM

Originally posted by disneysteve View Post

Why are you keeping the PNC card with the low limit and no rewards? If you could find an intelligent rep at PNC, you might be able to close the $2,000 card and have them transfer that limit over to the $7,900 card, giving you one PNC card with a $9,900 limit instead.

Do either of the rewards cards have annual fees? If so, do you get something in return for those fees that makes them worth it?

Canceling a card does ding your credit score, but only temporarily. Over time, that recovers. So I wouldn't keep a bad card just for that reason.

Using the card monthly for a couple of recurrent charges is fine and might help matters.

The story behind that is sort of odd. I applied for the PNC card and was approved for the 2k at like 18.99% (ridiculous, but I'm not paying interest so I don't really care). After a month I realized that the card didn't have points, which was the whole reason I applied for it. I went back and applied for the rewards card and was approved for 7,900 at 13.99% and a flexible spending limit. Don't really understand why the huge difference between the two approvals. I had thought about closing the card, but didn't know how much that would negatively affect my score.

**jpg7n16** · 03-16-2011, 08:35 AM

Have you ever tried CreditKarma? It's a free site with a 'score impact calculator' that would show the estimated effect of closing a card or two.

I don't really care about the credit score though, so I'd just close the no rewards account.

If you had a lamp in your garage that you weren't using, any logical person would say 'well either start using it, or -if you have a better lamp already- get rid of it.' But for some reason, people won't apply that logic to credit cards.

**disneysteve** · 03-16-2011, 08:43 AM

Originally posted by jpg7n16 View Post

If you had a lamp in your garage that you weren't using, any logical person would say 'well either start using it, or -if you have a better lamp already- get rid of it.' But for some reason, people won't apply that logic to credit cards.

Tossing the unused lamp from your garage doesn't affect anything negatively.

In the strange world of FICO, though, getting rid of an unused credit card drops your credit score. That can affect everything from the interest rate you'll pay for a mortgage to how much you'll pay for auto insurance to whether or not a potential employer will hire you.

It is a seriously flawed system, but it is what it is. That's why people play all types of games to try and maintain and improve their FICO score.

**JoshuaHeckathorn** · 03-16-2011, 10:01 AM

The act of "canceling" a credit card itself isn't what hurts your FICO scores. It's the loss of available credit, which will increase your credit utilization ratio if your spending patterns remain the same, that generally has the largest negative effect on your scores. To a lesser extent, the total length of your credit history and the average age of accounts could be lowered as well, which the FICO scoring model doesn't like.

Also, creditors will continue reporting to the CRAs even if you aren't using your credit card. You don't need to worry about that. What you need to worry about is your cards getting closed due to inactivity. If none of the cards have annual fees, I would keep them all open and set up small charges on the 2 you don't regularly use to make sure they stay active- just like you said. Of course, continue to pay them in full and on time every month. If any have annual fees that make keeping the card cost more than you get in return, then I would replace it with a better no annual fee rewards card first and then cancel the old one.

**herdjohnson** · 03-16-2011, 10:20 AM

Do they look at the average age of your credit accounts or the average age of your open accounts? If it's the former then closing this card would actually help since it's only a few months old. As far as utilization I'm not too worried. This is just 2k on a total of about 40k revolving credit limit (my dad has me as an authorized user on his Capital One card that has a limit of about 25k). And I never have more than a couple hundred dollars on any card each month.

None have any annual fees, BTW.

**MonkeyMama** · 03-16-2011, 10:39 AM

Originally posted by herdjohnson View Post

My question is what should I do with the other two cards? Should I set up one of my smaller bills (Hulu, Blockbuster) on each of the other two cards just so there is some activity? I don't want to make any large purchases on either one since the PNC rewards system is much better than BOA, but I know if you don't use cards they stop reporting to the credit agencies after a few months.

Thoughts?

As mentioned, that last part is not true. Whether used or not, open credit cards are reported to the credit agencies.

Only open credit counts for length of time.

I personally have a Grade F on "length of time" at the moment, and could care less. Still gets me a FICO score near 800.

If you want to keep your cards though, setting up a couple of small recurring payments is a good idea. I don't have any "big bank" cards at the moment, but usually the credit unions and smaller banks will send me a notice that they will close my card if I don't make one small purchase. So I haven't found it a big deal to keep the cards open. That said, these days the banks are closing these unused cards more often. Paying a small monthly bill may keep your cards safe from the cut.

**herdjohnson** · 03-16-2011, 10:50 AM

Are you all sure? I had a Sears card from way back that stopped reporting on my credit report nearly two years ago. I used it to get 20% off an elliptical only a few months ago and last time I checked my credit report it was back on there reporting. Now there's just about a 2 year gap in their reporting on that card. I didn't have to open a new one or anything.

**littleroc02us** · 03-16-2011, 10:52 AM

Time and paying bills on time will improve your credit score. My wife and I have one credit card that we hardly use, but we pay off immediately and a mortgage that we pay extra on and our credit scores are excellent.

**MonkeyMama** · 03-16-2011, 12:32 PM

Originally posted by herdjohnson View Post

Are you all sure? I had a Sears card from way back that stopped reporting on my credit report nearly two years ago. I used it to get 20% off an elliptical only a few months ago and last time I checked my credit report it was back on there reporting. Now there's just about a 2 year gap in their reporting on that card. I didn't have to open a new one or anything.

I usually keep one extra card open (backup/unused) and it always reports to the credit bureau. Cards I haven't even used in years.

It will show as an open account. It might not show as "on time payments" if there are no payments being made. (Don't know off the top of my head). But the fact that the card is there, the length of time it is open, and what the credit limit is, should stay on your reports until you close the card.

**herdjohnson** · 03-16-2011, 12:51 PM

Oh, yes I'm sorry. That's what I meant, that it won't show that you've paid as agreed, or whatever term it uses.

**canada94** · 03-22-2011, 09:48 AM

At the end of the day if you pay your credit cards off in FULL every month, you are using Other Peoples Money, its when you dont pay it off in full that you get stuffed

Multiple Credit Cards