Closing accounts or keeping it....
 

Hi All....

I see some people applying for 4 credit cards at a time most have annul fees. What do you guys do when the renewal comes? Do you guys close the cards? lets say I open 4 cards now and close 4 cards next year. Don't I have to open few cards to keep my credit score intact? Appreciate the help.

I am thinking of applying for

2 chase cards and
2 Citicards on the same day hence the question.

thanks.

No, you don't have to. If you can benefit from the card despite the annual fee, then keep it. If not, then don't.

You can also try to convince [some of] them to wave annual fee or the part thereof or downgrade it to a no-fee card. It's up to you. If you don't need the card close it but transfer the balance to another card from the same family so your utilization rate doesn't go into the toilet. In the end, you can't churn credit cards (well not many of them) if you always keep them.

Do you suggest applying for that many credit cards at once or should I apply Chase and wait for Citi....I read about the App-o-rama hence the decision.

I seem to be in a minority but I close many accounts within 2-3 months of opening them. I’m aware of the general recommendation to keep an account open for 11.5 months and then closing it if the annual fee cannot be waived. However, if one wishes to churn a card, the old account must often be closed prior to applying for a new account. There are reports of people getting the exact same card 3 or 4 times in 1 year, it’s likely they closed each account within a month or 2 before applying the next time. And with AmEx specifically stating that certain bonuses are not available if one has had the same account within the past year it makes little sense to keep an account open if one is not using it.

As a recent convert to the App-O-Rama or Every-90-Day-Churn concept I strongly endorse it. Much better to do 4 or 5 or 6 applications all at once (rather than spreading them out over a few weeks or a month or 2). In that way, some of the card issuers won’t see all the other credit pulls.

It depends on the card, your lifestyle and the usage you get out of that card. Some cards will offer bonus miles on the anniversary of that card which might be well worth paying the annual fee and then canceling. There are other cards which in my mind have no use other than a quick 35K-50K miles which I would never pay an annual fee for.

There are also some cards you might feel worth keeping them open due to your lifestyle. I personally like having the Chase Ink Bold open just because its a great card to put utilities and gas on each month in order to maximize points in those categories and the Chase Sapphire just because I eat out a lot and can get double points at restaurants. Both have other benefits that might be a positive or negative to your lifestyle but that is just an example.

Just look at your spending habits and see if any of the cards you have fit your lifestyle and create your own philosophy from there. Everyone on this board is different so there is no right or wrong card to keep or cancel. Just do what you think would maximize miles for your own particular situation.

Just depends on the value of the card and you're earning.

It usually goes:
1-retention bonus
2 - downgrade
3 - cancel

Cancelling isn't good for your credit unless it's a business card, which goes on your business credit line - not your personal. Noob posted ab that today.

I happened to close an account. My score dropped 2 points. It is not a big deal but is it still a good idea to call cities and ask to move that credit to a different card? The card was closed 2 months back. Will they still do it? Is the damage done and I should not care.

Decision time
 

I face an analogous decision here, and am torn.

My Chase Southwest card -- which I have had for ages -- is up for renewal. My plan was to shift the credit over or close it to cover a Chase United Explorer application.

Turns out, that wasn't necessary, as I got approved for the United Explorer card without having to do anything with the Southwest card.

This leads to my dilemma: do I now close to Southwest account to save the annual fee (fairly low) OR do I keep it with the intention of "sacrificing" it later to get a new card??

I am strongly considering holding onto it so I can use it as a future "trade off" in a call with a reconsideration line for another type of Chase card. I seem to recall reading (or hearing from a Chase rep) that it is better to close one account to gain acceptance for another, rather than to close it before applying for the new one.

Also, they send me some decent 0% offers (which is why I have had the account so long, though I have hardly used it beyond that), so I could see myself using it for that.

Finally, I am NOT a big "card churner." In fact, I seem to have too many open accounts, and am seriously considering weeding a few of them out (primarily some AMEX cards that I never, ever use). That said, I am okay continuing to hold this Chase card, as they seem to have a number of other card options that I wouldn't mind moving to later this year.

Thanks in advance for any thoughts/advice!

You can learn from my mistake. Don't close the card. I recently closed a Chase Visa w/ $7K limit thinking it would "make room" for my next Chase card and I could avoid a call to the reconsideration dept. Instead, when I got denied and called the reconsideration line, I had to move credit around from a different existing card. Essentially, I lost $7K of available credit by closing the card. Had I waited, I could have just traded one credit line for the other. I gained nothing by cancelling in advance.

This is my profile, too. I'm loving the points game but not really up for a fistful of new cards every 3 months. A few a year is more my speed.

If I were you, I'd weed out the AMEX cards, because the fees tend to be higher on many of them (PRG). Now, fee-free cards should go in the sock drawer for life-- just buy a cup of coffee once a year to keep them active and you will get two good benefits on your FICO: ever increasing age of accounts, and a nice hefty unused credit line that keep your utilization ratios low.

We keep getting very low (1%) cash advance offers (blank checks) for a BA visa... I consider unlimited access to 10-20K in 1% loans to be worth paying the yearly fee of $95. I could save that by simply paying my mortgage for a few months with one of those checks, then enjoying the 1 year interest free money. My DH gets the 1% offers, I, alas, only get 3% offers. So my card will go on the chopping block next year.

My strategy is to find a couple fee-free cards to have and keep and then churn cards with fees. I made the mistake last year of cancelling my oldest open credit card and my score took a fairly large hit (the card had an annual fee and didn't fit my current lifestyle). My score has recovered, but it was a lesson in score management. I will be cancelling a card in the next couple months due to annual fees, so I will take that data point on score effect and modify my plans going forward.

Thanks SquarePeg - that's kind of my thinking on it. The card has some perks for me, and I think I will need the credit as a future "trade-off"


StartinSanDiego - thanks for the tip on dusting these cards off once in a while to keep them active. I need to do that!

Whenever I cancel a card with a bank, I usually ask if they can move the credit limit over to another card I am carrying. I have never been denied this request. I tell them that I value my credit and their establishment, and would like to keep my credit limit with them intact. Secretly, I only want to ensure I have credit to move around on my next churn with them... which has also always worked to help a card get approved.

1- Move the credit line from the SW card to another chase card you hold and cancell it.

2- Wait a few months and open another Chase card. Try the Sapphire Preferred or an ink card or go for the version of the SW card you didn't have.

Have a great day.

Chris