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To Enhance Score, is it Best to Consolidate, Cancel or Accumulate Existing Cards?

To Enhance Score, is it Best to Consolidate, Cancel or Accumulate Existing Cards?

Old May 11, 07, 10:54 am
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To Enhance Score, is it Best to Consolidate, Cancel or Accumulate Existing Cards?

I have multiple cards from the same bank. I have high credit limits and a low, or zero balance on the cards. I pay my bill in full each month.

When applying for new cards from this bank, I've been phoned and invited to reduce my credit line on certain cards in order to accommodate the new cards. No refusal to issue the new cards.

To maintain the highest possible score, is it best to wait for the bank to contact you this way, or would you maintain an equally high score by proactively reducing your combined credit line before applying for a new card? Would closing accounts ahead of time be a negative?
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Old May 11, 07, 1:06 pm
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http://www.creditboards.com and http://www.fatwallet.com/c/52/
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Old May 11, 07, 1:32 pm
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Definitely read those credit boards for more details from people who pay close attention to these things. In practice, I've noticed that my credit score moves very little - even when I am hitting new rewards cards pretty hard.

That said, within Chase - where a bunch of my rewards cards are these days - I'm going to eventually consolidate and knock out some unwanted cards. Ideally, I'll try to keep the oldest account numbers alive and kill off the newer ones. But I don't think it really matters a whole lot.
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Old May 11, 07, 2:08 pm
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I've checked a lot of those boards in the past and I seem to remember gleaning this bit of information:

Shift your lines of credit to the cards you want to use, zero'ing out the credit line on the cards you want to cancel before you cancel them, as cancellation of newer cards with 0 or near-zero credit lines will be the ideal way to minimize damage to credit score by closing a card. Oh and as pinniped said, keep your old card numbers alive (unless they have an annual fee, in which case you can try to get the issuer to convert it to a non-annual-fee card, which retains the 'age' of the credit card).
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Old May 11, 07, 2:28 pm
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"That said, within Chase - where a bunch of my rewards cards are these days - I'm going to eventually consolidate and knock out some unwanted cards. Ideally, I'll try to keep the oldest account numbers alive and kill off the newer ones. But I don't think it really matters a whole lot."

Chase does not allow you to "consolidate" cards. They allow you to "re-allocate" credit lines between cards, then cancel the remaining card. They require you to leave at least a $500 CL on all cards though.

So if you have

Card A - $3000 limit
Card B - $2500 limit

and you want to close Card B because its newer,

You can reallocate lines to
Card A - $5000 limit
Card B - $500 limit

then close card B and wait for it to drop off. The only real reason to close Chase cards is:
A) Card has a fee
B) You want to close some cards because you want to apply for new ones and are afraid they will reject you due to having too many of their cards.
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Old May 11, 07, 2:55 pm
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Scores dont seem to move too much if you close cards but for one's own organizational mindset, it may be good to have fewer than too many. If you can manage a lot, go for it. I am in the process of having it so we have less. I also am batting around the idea of getting the types of cards with no preset limits. Example: Citi MC for AAdvantage already lets you go over the limit. NWA's WP Signature Visa lets you whereas the Platinum one I have has a 12k limit. I would like to have the ability to go beyond that. We also have Amex.

So in my mind, fewer is better, but get ones with high limits or no limits, and I don't think it changes your score too much to do the changes and consolodate.

MM
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Old May 11, 07, 4:42 pm
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This topic is really beyond the scope of Flyertalk. I suggest looking at the links above for further info.

I'll go ahead and close this here.

Regards,

Flipside
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