Too many credit cards. Should I close some?

Question

I have excellent credit and do not need any more cards but I think I have too many cards though! I know that closing accounts can negatively affect your credit score, but what about having too many credit cards? My credit score is 783. I want to buy house next year.

1/ boa visa # 1 $22,000 limit Since 2000 Paid Off
2/ boa MasterCard # 2 $17,000 limit Since 2001 Paid Off
3/ boa MasterCard # 3 $13,000 limit Since 2004 Paid Off
4/ AT&T MasterCard $12,500 limit Since 1998 Paid Off
5/ Wells Fargo Visa Credit $12,000 limit Since 2001 Paid Off
6/ Banana Republic Dept Store $ 1,000. Limit Since 2000 Paid Off
7/ Home depot MasterCard $ 5,000 limit Since 2004 Paid Off
8/ Best buy Dept Store $ 2,500 limit Since 2005 Paid Off
9/ CompUSA Dept Store $ 4,500 limit Since 2005 Paid Off
10/ Discover $ 6,000 limit Since 2006 Paid Off
11/ Chase Visa $ 6,000 limit Since 5/2006 $4,000 Balance with 0 Apr. I will pay off in May 2008.
Should I cancel any of these accounts? (Best buy, Banana Re, CompUSA) Or should I just keep them all open? Thanks for the advice!

Answer 1

your credit score of 783 speaks for itself, you have near perfect credit. The mortgage companies will look at the score and be very happy, however traditional loans require the underwriter to count a min payment for every card you have open. usually $10 - $20 per open card even if it has no balance if you have 11 cards that are all paid off it could potential be counted as monthly payments totaling $220 (11 cards @$20 ea). They will take a percentage of your gross income some where between 28% to 35% and then subtract your monthly bills (loans and cc debts along with child support, daycare or spousal maintenance) You will still qualify for a loan but it may limit the amount they can lend you based on your debt to income ratio (DTI) . If the $220 doesn't affect your dti that much then leave them alone for now as closing credit cards can temporarily lower your score.

Answer 2

First of all with a 783, you will have more than enough offers from mortgage companies that you won't have to look for offers, as you can choose the best rate.

As far as what to drop. Drop all cards that have had no activity for a few years. That includes charges and payments.

If you have zero balances and payoff everything every month, keep only those cards that give you good rewards.

This will increase your credit score. It looks better if you close an account than having a card company close the account due to inactivity (why this looks better is anyone's guess).

Rule of thumb, if you do run balances, don't let the balance be more than 30% of your entire credit availability.

Answer 3

Better not close until you applied for home loan. If you are so inconvenience with many CC, close some with lowest limit. By doing so, you can reduce # of CC but not so much effecting to C Limit which takes big role in credit score. After closing CC, check credit report and it should be mentioned as "close on request" or sth like that. But exactly not as "Closed by creditor" which is very very bad.

If within 6 months from buying home, don't do any.

Answer 4

You will not be able to buy a house with so many credit cards that have an open status. You should look into renting a motel room rather than trying to buy a house. Why so many credit cards?

Answer 5

Every credit card that you have paid off or not is considered potential debt and will go against you if you want to buy a house or something else big you want to finance. Being paid off only matters if it is closed. You get the good credit rating from them with out your next lender worrying about you starting to use them again and NOT being able to pay them...

Answer 6

Keep 3 all around cards like VISA, or two of the lowest interest rate cards.

Do you really need credit cards for clothing and home improvement? I could see if your a general contractor but that's a lot of plastic.

Answer 7

CLOSE THE LOT!!!

Open credit is tempting and goes on your credit report and counts as a liability. Also open to hidden fees and charges on 11 credit cards.

Answer 8

Way too many cards. Keep two and get rid of the rest. What would you do tonight if all of your cards were lost or stolen?

Answer 9

Wow. I only have two, and I only use one of them for online purchases (I don't use the other card), and I always pay it off as soon as the balance shows up on my account.

Answer 10

Whoa!