What is the best way to deal with existing credit cards for newlyweds?

Question

My wife and I are wondering how we should deal with each of our individual credit accounts. For ease of financial management we would like to reduce/consolidate credit lines. However, we understand closing credit lines could adversely impact our credit ratings. We don't want to do anything to reduce our individual ratings (both of us have credit ratings in the low 800).

Just another detail..My wife and I only use one card each, but have a several others. Our cards are paid off monthly so there is no revolving debt.

Answer 1

Unfortunately, you can't have it both ways - you can't consolidate/close some accounts and not have it affect your credit score. But the good news is that it won't affect your score enough to matter. With scores in the 800's (I assume you mean FICO scores, and not VantageScores), your scores would have to drop over 50 points before it would mean anything when applying for credit. And closing a couple of accounts won't cause that large of a drop unless they have large credit lines and you choose to keep a card with a small credit line.

That being said, there's no real benefit to closing any cards. If you use them a couple times a year, it's likely they will keep your accounts active. If you don't they may eventually be closed without you taking any action.

Don't forget that if you have cards in good standing that you don't use, you can attract some good offers from the issuers to entice you to use them, and you can use that to your benefit. Just last month I got a letter from Citibank offering me 3000 bonus Thank You Points if I would charge $300 on a card I don't use before the end of August. Those points are worth about $30 so I'm going to do it. Free money, right?

It's your decision but I would recommend keeping all your cards open. If you choose to cancel some, it's best to keep the cards with the largest credit lines open. You have high credit scores, and I don't know why you would want to change what you have done that got you there in the first place. Chances are those open accounts with no usage helped keep your utilization low which is good for your score.

Answer 2

Definitely pay attention to what these other people are saying. I'd like to simply and add a few points.

I'm a mortgage planner with Chase. Credit is my expertise.

1. You and your wife should keep your oldest credt line open no matter who it's with or the credit line amount as long as you don't pay an annual fee.

2. You should keep two others open per person that have at least a 5k limit. Credit Bureaus score base off of open lines vs. what's being used. If you can always keep your debt at 33% of what's available in credit lines, your score will always benefit.

As for paying off your debt:

1. If you have the ability to pay all of your debt today, do it. If you decided not to consolidate your debt, the easiest and fastest way to payoff your credit cards is to rank them by their interest rate. Pay only the minimum payment on every card except for the one with the highest interest rate. Pay as much as you can towards the one card with the highest rate. Once that is paid off, your average rate of interest decreases. Continue to do this until you've worked your way down to your last card.

2. If your debt is $10,000 or less, consolidate it with one or two cards taking advantage of fixed rates that are good for the life of the consolidation. Chase usually has the best programs at 5.9%-7.9% for the life of the transfer. Take a 0-2% starter rate if you think you can pay the balance in full by the time the rate expires.

3. If you are a homeowner and you owe more than $10,000 it's usually cheapest to use the tax leverage in your house to consolidate your bills and increase the amount of money you get back on your taxes at the end of the year.

My name is Casey Casperson and I work for Chase. You can visit my website at www.CaseyCasperson.com or call me at 561-573-2955 for more information.

I also like to refer my clients to http://www.creditresourcecorp.com/

This website provides good practical information for anyone that needs factual data.

I hope this helps. I just got married on 7/7/7 so I know what you are going through :)

Answer 3

If it were me I would leave them how they are now, do not put eachother on them (because authorized users do not get any credit benefit from being an authorized user and so why bother). The long good credit history will give each of you a benefit in your own rights.

If you want to reduce the debt on the lines you can take out a consolodation loan and pay the debt down, but I don't think it is necessary for you to close the positive lines you each have.

Answer 4

Pay the cards off. Keep the oldest card each of you have that does not have an annual fee -- this keeps your credit history. Close the rest. Your score will take a small hit but will rebound quickly.

I personally think it is a very bad idea to keep extra accounts open. It's just asking for problems. You really don't need more than one or two major credit cards (Visa, Mastercard).

Answer 5

If the amounts are relatively small, I'd suggest consolidating them, paying the amounts off, and leaving the credit lines in place. That might even help to improve your score. If you do need to reduce the amount of lines, I'd start with lines that are the newest, as they do not add that much to your credit history.

Answer 6

First of all go for credit cards with 0% apr rates. Discover have some cards with 0% intro apr rates and there are some reward programs also, like 5% cash back on certain purchases. Go for this type of cards and also pay the bills on time.
Now you can also think of consolidation. Go to reputed companies they will help.
To know more you can visit
http://www.creditcardbiz.blogspot.com

Answer 7

Verses consolidation, why don't you pay the individual cards off smallest to largest closing them as they reach zero balances.