Keep or cancel old credit cards?
 

I have accumulated around 15 credit cards playing the bonus game. Now should I cancel cards or keep them once I receive the bonuses ( I understand some cards like United Chase card requires you to pay the annual fee )?
I figure the fewer cards I have, the lower my credit line making it easier to apply for new cards?

My rule of thumb:

If it requires an annual fee and I don't plan to use it, I cancel it.

If it doesn't require payment of an annual fee, I keep it.

If I'm worried about having too much credit open, I call the credit card CSR and ask them to lower the credit line on dormant cards. (Be careful, though - percentage of available credit used is also a factor in FICO, with a percentage <30% being [reportedly] desirable, so don't lower your available credit too far.)

Keep the oldest cards if you do decide to cancel any.

I would tweak this advise. Your goal should be more open credit not less. In the very rare instance that an issuer has a problem with the size of your credit lines you can close or reduce them at that point.

When you close a credit card you should request they consolidate it with another card so that you combine and keep your credit lines.

asking to have your credit limit lowered is terrible for FICO. so too is closing older accounts. I agree if there is an annual fee and no compelling rewards closing can make sense. you can learn more on why closing accounts is often bad and why higher credit limits are good at creditboards.com

The problem is with 15-20 cards I have a credit line that I assume is way above the average US resident. So as long as my credit line doesn't drop below the average for the country, why would it hurt my FICO score?

The less cards I have open, the less overhead I have to manage all them. Also I could easily make a mistake and forget some actually had annual fees when I thought there was none.

I agree that consolidating cards is a good way to go.

If there is no annual fee and you don't use them, there is nothing to manage. Put them in a sock drawer and forget about them until needed.

Closing them will drive up your percentage of credit utilized which is bad for your report. Probably the only way that having unused lines open will hurt you is if you apply for a mortgage and they think you will run out and charge $500K of stuff for the new house. If that is an issue with your lender they will let you close them at that time.

If you want to consolidate, look for a good offer (miles, points, 0%) on a new card from the same bank and then ask to have the credit lines from the old cards consolidated into the new.

Chase offered me 0% for 16 months on balance transfers ($99 capped fee) if I opened a new Visa, so I did. I then closed an unused Chase MC and moved that $4K limit onto the new card and also moved $14K from another Chase Visa for a total line of $30K on the new card. I left $1000 on the old Visa since it was one of my older credit lines. I then wrote a balance transfer check to myself for $29,000 which is now sitting in a savings account earning 5.3%. Thats about $2300 in profit over the next 16 months - thanks Chase! ^

I am faced with this same dilema, I have a rather generous credit line on my SPG Amex and currently its not within my rotatation. I was about to close the card and on second thought I decided to keep it. I have had it for a while and figure I can absorb the $45 fee (well atleast this year).

If you are getting dinged for too many open lines of credit then you may want to close a card out. It's really a matter which dings you more from the mythical 850 max.

I get Citi Identity Monitor for free with my Plat Citi Amex. It has a scenario wizard that will tell you specific FICO score changes by doing various things. It showed me where the sweet spot was between closing cards and keeping them.

I actually just use the credit card to make the minimum purchases to get the bonus miles/points . So I never carry a balance on them and therefore my % of credit utlized is always ~0% ! Therefore in this case, cancelling my old cards is fine, less to worry about.

I have been reading on flyertalk that you should not use more than 50% of your credit line since..

Interesting that the SPG Amex isn't in your rotation. I try and put every single purchase on that card, as IMHO there is no other card that competes. I'm trying to find a backup card (for times when vendors don't take Amex :( ) but so far I haven't been able to find one I really like. May I ask what your go to card is?

I don't think this is good advice... If you have an "old" card, you want to keep it open since your average account time open is a factor in determining your credit score... It's not good to open new accounts and close old ones by consolidating like you suggest...

I like the SPG card, but due to a couple of cc promotion's spending have been diverted somewhat. I fly mostly AA and usually have enough FF points, plus after buying into into Marriott's timeshare, I am looking for more flexibility when it comes to getting flights. I think I have found it in the ThankYou Network (even after the recent devaluation). I am also giving cash back (Discover) a try.

For the next year or so my card spending will be:

Citi Premier Pass Elite (PPE) - Airfare, supermarkets, gas station, drugstore, monthly NJT train pass and parking. Will also use it for my to day purchases, but that will depend on my need to match flight points.
Discover - depending on their 5% cash back offer
Marriott Visa - Marriott related charges
SPG - depending on my flight points matching limits on the PPE

Ummm. I don't think it's necessarily 0%.

As I understand it, the FICO score is based on a snapshot at the time the score is done, not on how much you roll over each month. So, if you spend $5000 of a $10K limit for some promotion, you may be considered to have utilized 50% of your credit even if you pay the bill in total when it comes.

Many credit cards (e.g. Citibank) report your limit as of the statement date. I pay my "no limit" citi cards before the statement date so that my utilization is 0% on these cards.