Author Topic: Close my unused credit card accounts or keep them open?  (Read 1005 times)

kms

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Close my unused credit card accounts or keep them open?
« on: November 20, 2018, 08:09:07 AM »
This is probably a no-brainer for most people but I'm trying to figure out the best strategy to deal with my credit cards. First things first: no debt involved here, all cards are paid in full each month and have never carried a balance.

Current situation: I have a total of four credit cards, my wife has a total of three.

American Express Blue Cash Everyday
Credit limit: $23,000
Rewards: 3% cash back on groceries, 2% on fuel, 1% other
I use this one for most purchases except for fuel, see below.

Bank of America Cash Rewards VISA Platinum Plus
Credit limit: $1,500
Rewards: 3% cash back on fuel, 2% on groceries, 1% other
I use this one almost exclusively for fuel.

Those are really the only two cards I use. In addition, I also have a Lowes card with 5% cash back on all Lowes purchases that I opened when we purchased our fridge for the new house and they were running a 10% off special that day, which saved us a substantial amount of money. Haven't really used it since July 2017. Then there's a JetBlue Barclays credit card that I opened recently when booking a flight because they had a $100 cash back plus 40,000 reward points when you spend $1,000 or more in the first three months special.

My wife uses her American Express Blue Cash Everyday (joint account) and Bank of America VISA card most of the time as well. In addition she also has a Discover card in her name that we haven't used since December 2017. Discover has rotating 5% cash back specials, which we should take advantage of more often but always forget about.

I'm torn between closing the Lowes, Discover, and JetBlue cards and keeping them for the occasional additional benefits, for example Discover's 5% cash back on fuel between Jan-Mar each year or Lowes 5% on all purchases should I actually ever need to purchase something from them. On the one hand we spend so little in general that it really doesn't make a difference whether we get 2% or 5% cash back - we're talking pennies on the dollar here and most likely less than $50 total per year for a substantial amount of mental dedication in trying to remember which card to use for what. On the other hand closing these cards would be like turning down free money. I'm also uncertain about the JetBlue card since it has only been opened in September, so I'm hesitant to close it again already now that I've taken advantage of its benefits.

I should probably add that I like to keep things as simple as possible and my wife and I both live a minimalist lifestyle with the absolute minimum amount of clutter, both physical and intangible. This mental attitude extends into pretty much every single aspect of our lifes, and accordingly there is a certain level of anxiety associated with keeping stuff around that neither of us really needs and/or uses, including these three credit card accounts.

What would the collected forum intelligentia suggest I should do?

a) give in to my anxiety and close them for good in order to keep a clean sheet
b) keep them open for the occasional benefit

FIRE@50

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Re: Close my unused credit card accounts or keep them open?
« Reply #1 on: November 20, 2018, 08:13:28 AM »
Keep them open as long as there is no annual fee. Just chuck them in a drawer if you aren't using them. Eventually, the cc company will likely close them out for lack of use, but in the meantime it will look good on your credit report.

frugaliknowit

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Re: Close my unused credit card accounts or keep them open?
« Reply #2 on: November 20, 2018, 08:29:11 AM »
How much fuel do you guys buy per year?

Personally, I run just about everything (except "pump and dump" front loaded airline cards) through Citi Double (2% on everything).

Frankies Girl

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Re: Close my unused credit card accounts or keep them open?
« Reply #3 on: November 20, 2018, 09:23:15 AM »
Agree with throw them in a drawer instead of closing them. We have a couple of cards like this but we have a very small auto pay attached to them to keep them active.

When you close credit cards, you risk dropping your total credit limit and your debt to credit ratio as well. And depending on how long you've had the cards, the length of time is a good thing too. Closing a really old line of credit can ding your score too.

If you don't care about your credit score and just want to stop thinking about them, then don't worry about it, but there isn't any really great reason to close them as long as you know where they are and maybe have them plugged into Mint or Personal Capital so if any unauthorized activity occurs, you can shut it down fast.

kms

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Re: Close my unused credit card accounts or keep them open?
« Reply #4 on: November 20, 2018, 10:32:36 AM »
I do keep those cards in my drawer already, the only ones in my wallet are AMEX and VISA. However, the mere fact that I know they're in that drawer makes me anxious. I know most people won't understand this but it's a mindset thing - the less I own the less I worry about and the happier I am. That's why I feel anxious just having those cards around without ever using them. My brain works in complex and incomprehensible ways :-)

I'm not too worried about my credit score doing down because we don't have any debt except for the mortgage and have only been in the US for slightly over two years, so our credit history is fairly short anyway. Mine is 1y5m on average, and my four cards are as follows:

AMEX: 2y4m
VISA: 2y
Lowes: 1y3m
JetBlue: 2m

Thus, my average age of credit history would actually increase to 2y2m if I would close the JetBlue and Lowes card. My wife would be in a similar boat - her history would increase from 1y9m to 2y2m if we would close her Discover card. In return, my available credit limit would decrease from $38,100 to $24,500.

From what I hear the main reason to keep the is that there isn't really a reason to toss them, correct?

@frugaliknowit Since I work from home and my wife's commute is around 25 miles return we spend less than $800 on fuel per year.

BrightFIRE

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Re: Close my unused credit card accounts or keep them open?
« Reply #5 on: November 20, 2018, 01:02:53 PM »
I'm not too worried about my credit score doing down because we don't have any debt except for the mortgage and have only been in the US for slightly over two years, so our credit history is fairly short anyway. Mine is 1y5m on average, and my four cards are as follows:

AMEX: 2y4m
VISA: 2y
Lowes: 1y3m
JetBlue: 2m

Thus, my average age of credit history would actually increase to 2y2m if I would close the JetBlue and Lowes card. My wife would be in a similar boat - her history would increase from 1y9m to 2y2m if we would close her Discover card. In return, my available credit limit would decrease from $38,100 to $24,500.
@frugaliknowit Since I work from home and my wife's commute is around 25 miles return we spend less than $800 on fuel per year.

I'm pretty sure you're wrong about how average age of accounts works. When you close the card, the account history is still reported, so the age is still on there - I think it gets reported for 7 more years. Once that finally ages of your report, then your average age may go down or up, depending on what else is on your report at that time.

Rob_bob

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Re: Close my unused credit card accounts or keep them open?
« Reply #6 on: November 20, 2018, 01:47:15 PM »
If you really feel like you need to close some then the Lowes card would be my first pick because closing store brand cards has the least effect on your credit score, according to Clark Howard.  Next would be the card with the lowest credit limit.  If you are worried about using them just because they are in a drawer then just cut them up.

I personally have 8 credit cards but only use 3 regularly.  Last time I looked my credit score was around 830.