Should I cancel cards?

[InDebtInMD]

OK -

my wife and I are about 18 months post discharge. We have gotten some cards (Orchard Bank, Merrick, etc) and used them. Paid on time, etc.

I was thinking of closing some of the accounts that I no longer use. i.e., close the ones that charge the high participation fees, etc.

Will this negatively affect my credit? Positively affect it? or no effect at all.

[angelaohio]

Don't Do It!!!

hi, don't cancel those!!

a part of your credit score is base off of length of account history. the longer you keep an account in good standing the better your score.

another LARGE part of your score is your debt to credit line ratio. if you close some accounts that number will go up. in other words, to maintain a high score you want open accounts in good standing with very small or no balance.

for example lets say you have about $2000 in credit card debt. you have credit lines totalling $10,000. that puts you at a 20% debt ratio (pretty good for scoring purposes) lets say you close a couple of those accounts and reduced your available credit to $4000, that puts you at 50%. that's when your score starts falling.

if it were me, i would keep them open whether i use them or not.

[InDebtInMD]

thanks for the info.

Sounds like a plan - whatever 'participation' fees some of these card offer I'll just chalk up as the cost of rebuilding credit.

[SinkingFast]

Sounds like a plan!!

What Angela said is what I've read.

Length of Credit is one part of the equation. And debt to LOC ratio is another part. If you close accts, you shorten the length of time you've had Credit AND increase your debt to LOC ratio.

Maybe one thing you can do is talk the "Fee" CC's into reducing or eliminating your annual fees. Tell them you have other CC's without fees and are receiving offers for other CC's without fees. Ask the "Fee CC's" to reduce or eliminate their fees to keep you as a customer.

Can't hurt to try!!

[HHM]

The benefits of length of history is measured in years, not months. For example, if you got two cards, that charge fees, 2 months after discharge, and then got another, no fee card, 8 months after discharge, there will be little appreciable benefit to keeping those first two cards.

I would not keep any card that charges you a fee, or do what SF recommended, see if you can get your accounts upgraded to no fee accounts.

In the end, more than anything else, time heals your credit.

[FilingOnMyOwn]

Those little revolving credit accounts for 300 or so each are a great start, but I see no reason to keep any card that charges fees once better offers become available.

I've had over a dozen cards post bk, I've cancelled the piddly ones one by one as they were replaced with better cards, about 5 or 6 I've closed now. On the remaining 8 or 9 accounts that I have held, none have fees, and I now have about $25,000 in available credit. Having a few extra cards for 200-500 each wouldn't be doing much of anything but cost more money.

Its recommended that you have at least 3 revolving accounts to rebuild. Once you get your 4th, 5th, etc., you can start cancelling your ripoff cards with little worry of damaging your credit scores.

[AMISLANDER]

Those little revolving credit accounts for 300 or so each are a great start, but I see no reason to keep any card that charges fees once better offers become available.

I've had over a dozen cards post bk, I've cancelled the piddly ones one by one as they were replaced with better cards, about 5 or 6 I've closed now. On the remaining 8 or 9 accounts that I have held, none have fees, and I now have about $25,000 in available credit. Having a few extra cards for 200-500 each wouldn't be doing much of anything but cost more money.

Its recommended that you have at least 3 revolving accounts to rebuild. Once you get your 4th, 5th, etc., you can start cancelling your ripoff cards with little worry of damaging your credit scores.

So I guess I should start using my new card and give the HOOTERS some rest....? And get a third? I'd love one with air miles on it!!!