Right CC strategy
 

I found that I have too many active Chase, Citi & Capital One cards that I rarely use. Some of them have annual fees and I will be getting over the honeymoon period with them all and fees will be charged from the anniversary date onwards.

Since this is the season for pruning, I was wondering what is the best way to prune these cards so that I can launch an apporama when the next bazooka deal comes along (pardon the metaphors, 'tis the season to be drunk). The objective is (a) to not hurt the credit score (b) massage the credit score if at all possible and (c) to save money

1. Should I close accounts outright?
2. Should I call the CC companies to switch the fee payable cards to free versions (without bennies)?
3. Should I do (2) above AND request that the credit limit be reduced?
4. Any other course of action?

Thanks for any advice you may have.

In order to help your credit score, the best path would be to downgrade to the free version. If you close an account or reduce the credit limit, your balance-to-limit ratio will increase simply because you are decreasing the denominator. A higher balance-to-limit ratio has a negative impact on your score. If you plan on churning, you will probably have to close some of the cards in order to get approved by that lender again. Your credit will take a ding, but you have to weigh the pros and cons.

If you're trying to massage your credit score, spend money on each of your open credit cards and pay it off on time in full each month. Over time, you will build a long credit history with several lenders.

re
 

balance-to-limit ratio wont change much if hes got no balances and not using cards....shut em all down...keep a few no fee cards to have some long term accounts....points from opening and closing accounts are minimal and fall off in a short time. If you want new bonuses you need to shut down old cards and wait to reapply.

My rule is never pay an annual fee, never accept offers to switch to no fee card. This has been my rule for twenty or more years and when I break it I likely have regrets.

Only fees I paid in the last year, BA (to get 100K of the now devalued BA miles) and Starwood Amex which I keep from year to year for ongoing payments. Otherwise, when a fee shows up I cancel.

My credit score remains very, very high and I get new cards without much problem.

The banks punish loyalty and give those who cancel accounts big bonuses on new accounts. @:-)

Kinda crazy, but who ever said the credit system was sane? :D

Why is that?

so when you switch to a no fee card...does that most likely limit you from churning in the future? ie the AA citi cards?

Not sure what the best method is, but you were me, I would cancel all the recently acquired cards that have no extended value, and keep the old cards. As that guy said, most of the banks do nothing with regards to customer loyalty. If they don't like people gaming them for a bunch of new-user rewards then they can only blame themselves

In response to post #5, never accept offer to downgrade because you will still have an account (which you got with no bonus when you downgraded) which will likely keep you from getting a bonus in the future.

Plus, most of the downgraded cards offer downgraded spend bonuses such as only one mile for two dollar spend.

If it's a non-churnable card (like most Chase cards), you aren't preventing yourself from getting a 2nd bonus. Most people probably wouldn't be planning to put much spend on the no-fee card either. Unless I'm missing something, if the card is non-churnable, you don't forfeit anything by downgrading to the no-fee card and potentially improve your credit score by increasing your average age of accounts.

You are missing out on some seriously valuable rewards.

But what about non-churnable cards, where you just "drawer the card" and keep it open for credit score purposes?

I have 2 no annual fee cards that I've had since 1990! Get a couple that you can stick in the sock drawer for years (use them every now and then..) and churn the rest - (preferably holding each until annual fees are due....) Just my .02.

I have a United Mileage Plus card which I've had since 1987 with a credit limit of 25k. My total credit limit is 154k. My credit Karma score is 773. I'm sick of watching everyone getting 60k bonus miles offers while I'm getting nothing for being loyal. My question is how much of a hit on my credit score am I likely to get if I cancelled the card and when can I apply for the new explorer card after cancellation. Also, How long is it gonna take for my score to build back up? My $85 annual fee is due in Feb. Any advice?

I really don't understand the issue people have against AF :confused: , especially when the benefit is real, tangible and far outweigh the fee and the benefits earned under the no fee card. I recommended a card (reluctantly, I might add after she kept bugging me) to a co-worker and she was quite interested until I mentioned the AF which was waived the first year and the bonus points earned would have covered 5 years of fees.

i guess people don't want to commit to a card if they ahve to pay for it upfront...right now i'm not going to be paying for any annual fee cards but if something really good comes up (LIke BA 100k) then I might be willing..but until i've exhausted all the other good free offers i'll probably not get any of the paid cards(I don't even have a Hawaiian Airlines card and I live in HI)