Should I get rid of my lower limit credit cards?

[Brandy]

I have 2 high-limit credit cards (8k City & 6k BOA) along with a few low-limit older cards. I just got another 7k limit increase on my Discover CC, which more than covers my lower-limit CC combined. So my question is – should I close my lower-limit credit cards or do I keep them open? Any thoughts?

P.S. two of my lower limit CC have a low APR – 4%

[Tracy Winters]

I’d keep them open

I tend to recommend against closing credit cards, especially the older ones. Older credit cards give ‘depth’ to your credit report, which counts in your credit score as well – the older your credit report is, the higher your score will be. While it’s true that closed credit cards continue to appear on your credit report for a long time, they don’t count in your credit score as open credit cards do.

I many cases, closing a credit card results in a credit score drop.

There are, however a few more considerations:

• Do they have annual fee? – If they do, then the fee may not be worth the benefits to your score.
• Do they have rewards? – I would NEVER close my low-limit City CC because it give my around $250 rewards annually!
• Do you carry balances? – In that case you should take advantage of the low 4% APR CC you’ve mentioned. Personally, I’d never cancel a 4% APR CC (depending whether or not it has annual fee).
• How good are you in handling all those cards? – If you cant handle all of them, that’s another thing to consider.

As you can see, it all depends on the type of card you have, meaning the combination of annual fee, limit and rewards.

Hope this helps.

[Jeff]

The 4% CC is a gem!

I’d keep such a card FOREVER! If you carry balances, use this card to it’s limit. If you don’t – use it periodically just so that they don’t close it because you don’t use it, and PIF every time.

In any case, every 6 months ask for a CLI. Forever!

[Author]

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