The only time I reduce CL's is when I need to reallocate CL's with the same credit card company to get an approval for a new card. I did that with Chase for myself & my wife. I only close accounts when the above don't work and I want the new card with the giant signup bonus. (50K-100K points)

It seems like Chase seems to be the most willing to reallocate CL's after a credit decline if the reason is too many inquiries/too much credit allocated. They lump the two reasons in one statement. Since either of us don't have excessive inquiries, it was we already had the max credit that Chase would allow us to have.

Bottom line: Don't reduce CL's/close out accounts unless it is needed to get a large signup bonus (50K/100K points) on a new CC. I keep a few old no annual fee cards around (signed up in 1990's) to keep a more lengthy credit history.