Credit Cards/Available Credit

[HappyCat]

How many credit cards/available credit do you keep? How much is too much??

I recently paid off over $70k in credit card debt and medical bills (THANKS WIRR!!!) and I have paid my credit cards in full each month since becoming debt free. I vow to NEVER go back to being in cc debt. Currently, I have the following credit cards/limits:

Visa $500 (used for gas/incidentals...my daughter in colleges carries this card also..paid in full EVERY month)
Visa $6,500
Visa $4,500
Master Card 7,500

I struggle with my desire to close a few cards and my fear that I won't have enough available credit if needed. Which is weird because if you don't want credit card debt, you don't need the temptation, right?? I think I will be ok with the $500 card and the $4,500 card (lowest interest rate) but can't seem to pull the plug on the other two.

So how much is too much? not enough?? Just curious...

[Jaguar]

Congrats on paying over $70k in debt. That is a massive accomplishment. I don't have any cc cards.

[twinmami30]

Wow what a great accomplishment! I too am not much help Im in the rebuilding stage after bankruptcy so only two credit cards with very low balances..

[chiver78]

I will tally in the AM for ya. while I'm painfully aware of my remaining balances, I'm not sure where my limits are at the moment. I've seen a few "Your limit has increased!!!" sort of emails lately. I'll make a new post when I track it all down, rather than edit this one

in the meantime, congrats on paying all that down!

[simser]

I have 3. 2 with high limits (15/16k) and one with low limit (2k) that I don't even know where it is. However, I've never had a carry over balance, so I think I'm pretty responsible with them. I don't even know the interest rates because it just doesn't matter. I also keep them separate so if one goes missing I have a backup.

I like having a high limit I don't come close to (5k was the most I've ever had on there. Normally it's 1-2k since I put all monthly expenses on them) because it gives good utilization for your credit score. I want to keep a high credit score so I can buy a house soon.

[saveinla]

I have 3 also - 1 Visa with a CU, 1 Visa with a popular bank and 1 Amex - all 3 have limits between 10 and 17K. I don't think I can deal with more than 3 cards.

[Rocky Mtn Saver]

I have four, with a total of about $20k credit on them. I recently tapped some of it, so I like having it around for when I need it.

[Ombud]

Omg! I just closed one with a 40k limit (yes, $40,000) to avoid temptation. I still have one in the safe with a 10k limit but I didn't call the number to acknowledge receipt so I don't know if its any good. Frustrate DD b/c I only have 3 debit cards now (only acknowledging one to family) so she cannot borrow from me

How badly did I mess up by closing them? After Mom's death I kinda weirded out and went around closing all my stuff and hers. Not really sure why

[HappyCat]

twinmami30: You can recover from bankruptcy...it just takes time, patience and diligence. Good luck to you and welcome to the Savers!
Thanks for the "congrats" on paying off the debt. Anyone who followed my saga on WIR Midwest knows it was one step forward and two steps back!
I am going to close the highest interest rate card with $7,500 limit and the card with the $4,500 limit. I will keep the $500 card for every day stuff and the $6,500 card which earns points. I LOVE cashing in the points for account credit.
If I ever need to spend more than $7,000 at one time...that will be a bigger problem and a whole other discussion topic.

[teachermom]

It keeps your credit score high to keep them open, maybe charge something and pay it off occasionally to keep it active. One of the components of your score is the use ratio (balance used/credit limit) so low balance/high available credit is good. Also, if you have had them a long time, you want to keep them to have longevity of accounts which is another component of your score. Closing them can hurt your score a bit, but if you don't have anything you need to buy like a home or refi....it will only temporarily hurt you.

[Ombud]

So I messed up. I had the card since 1998

[chiver78]

I really hope I'm not the first to say this, but before you do any cancelling, please map out the "member since...." dates. all things equal (the perfect advice), leave your oldest accounts open. if you've got accounts across the map and calendar like most people (myself included), I would suggest just shredding the card to the older account but leaving it open even if it means leaving more credit available on the table than you might like.

the reason I suggest this is because in all my roller coaster adventures in the credit world, I still have a card in good standing (and it's always been that way, no matter the rest of my financial weather) that goes all the way back to 1997 when I was 18 years old. my parents never co-signed for a card before then, so this is the earliest card I have on record. it and its history are well-regarded for my record. if you have something similar, please don't screw yourself and close that account.

[HappyCat]

Thanks Chiver78 and TeacherMom! The card I am keeping open is the card I've had the longest which was the deciding factor. Good point!

[resolution]

We have two credit cards. One is in my name with DH as authorized user ($25,000) and one is in DH name with me as authorized user ($10,000). That way we both have a credit card in our name for the credit reports. We mostly use mine since it is the one with the cash back rewards.

If you want to simplify and reduce, I would recommend you keep at least two. That way if something goes wrong with one, like a fraud alert, you aren't left stranded somewhere with no money. Your oldest two would be best if the terms are similar to the others. You may be able to get the credit limits raised by calling up the bank that issued it. If some of your cards are from the same bank you may be able to transfer the credit over from one card to the other and then close it.

[Deleted]

I would cancel one of the two bigger VISAs but not both of them. Sometimes when you travel MC works better than VISA or vice versa, so I'd keep one of each (not counting the small VISA).

[mollyanna58]

I have four MC/Visa cards and a Discover. Three have limits over 10K, one is 6K, and the newest Visa
(just opened with Amazon for a $50.00 gift card) is only $500.00. I generally use one MC because it has the best rewards, unless Discover has an extra cash back deal going.

[muttleynfelix]

I have 2 CCs. Both have $4k limits. DH had 2 cards. One he closed several years ago and he just got notice that his $10k limit CC is being closed due to no use for like 5 years. He also has a care credit card which is for dental/medical expenses. But it only has like a $3500 limit. We also have a Home Depot card. Between those cards, they can handle any expense until we can transfer savings, arrange other financing, etc.

I would probably leave your cards open and just keep them in a file in your house. If you don't use them at all, they will close them for you.

[Deleted]

The two we use have a combined 20k. 4 more we have but don't use regularly I'd guess about 15-18k combined. Plus odds and ends store cards ( lowes, target, whatever gets me a deal...)

[chiver78]

okay, I just looked up all my accounts and balances. I should probably put an update in the NE group page, since I actually have it all right now....

anyway, my totals. I have 9 open major bank accounts, plus a corporate AmEx, plus a couple store cards that I opened for whatever financing deal they had (long since paid off, and should really be closed). I only actually have 3 cards, all of which I use as necessary - an AmEx, a Discover, and a MC from the same bank as my checking account that's only used if the first two aren't accepted. the remaining accounts are all low interest BT's whose cards are shredded the day they arrive. most of these actually have zero balances, and are only still open b/c they have no annual fee and they help my debt-to-available ratio.

total outstanding balance: $20742
total available credit: $81,370

debt-to-available ratio: 25.49%

[swamp]

I have an Amex with a $25k limit, a Disney Visa with a $15k limit, a discover with about an $11k limit, and assorted store cards I neVer use. All have $0 balance.

[kittensaver]

Happycat - just chiming in to second what teachermom and chiver have said. Unless you think you have self-control issues, just keep them. Put small amounts on them every once in a while (dinner out, a week's worth of groceries, a few books from Amazon) to keep them active, and pay them off immediately. Do this once a year. "Responsible" usage can only help your credit score. And in some kind of dire emergency, you have money available to you. (After the emergency is over you can always search for ways to get a loan at a much better rate and pay off the cards).

Congratulations to you! That's a terrific accomplishment and you should be very proud of yourself!

FWIW, I have a B of A VISA (my first credit card from 32 years ago) with a $10,000 limit (it started at $100!), a VISA with a $5,000 limit (an Alaska Airlines promotion that I no longer use), a Costco AmEx with a $10,000 limit and a Chase/Southwest Airlines VISA with a $20,000 limit. It used to be the Alaska card, but now everything (and I mean everything - except gas from Costco) goes on the Chase VISA to earn points. I pay it off in full each month, and carry no balances on any cards. Those points are our vacation/plane tickets each year.

ETA: The last time I had any balance was 2008, and like you I have these boards to thank for helping me get out of debt. In 2010 I earned MONDO points by paying for a wedding with credit cards, then paying them off (with cash I had already saved) when the bills came due. We got a really nice, almost-all-expenses-paid-by-points vacation to Hawaii for our trouble

[Deleted]

I think I have 60k available between 5 or 6 cards. You could put an autobill on each one (tv, phone, garbage, etc) and then freeze them in some water and leave them in the freezer. I think one of the financial gurus said to do that on TV once if you are worried about temptation or having it available for an emergency.

[Ombud]

Went into the fico.com education site and discovered that my credit should be horrid b/c I don't have a 'variety' of CLs -- mortgage, retail, charge, credit, auto. So it probably sucked before I closed that Visa anyway. But, as the amex is over 5 yrs old, it'll be a temporary hit. Google them and read up. All in all, Im satisfied with my decision. If I need a car loan, I'll go to usaa where I have my primary checking account

[❤ mollymouser ❤]

We have 2 credit cards. One with a limit of $23,000 (I think) and the other with a limit of $20,000 (I think.) We just use the first one and we pay the balance in full every month. The backup card isn't in our wallets and is mainly available if our first card gets lost or stolen.

[HappyCat]

ann81: I like your frozen credit card suggestion!

Mr. Cat also has a credit card so if I go down to just 2 it will be OK. We already have a house and we don't plan to buy any new cars anytime soon so I think the dip in my credit score will be manageable. Now, I just need to bite the bullet and CLOSE the others. It really does feel like you are giving away your security blanket.

[twinmama85]

Congrats! I have no credit cards at all, it gives me a lot of peace of mind, especially in the situation I am in right now, I don't have that temptation to use a credit card to buy things I don't need. I will never have a credit card again, nor will I borrow any money unless its a mortgage.

[seahorse]

I've closed out 3 cards one time and it really didn't have that big of an impact on my score. Just wait 3 to 6 months and your score is right back up there. I would never keep a card open b/c of a credit score especially if the card is tempting to use. I know all the experts recommend keeping the card but I can tell you from experience that just waiting a couple of months after the closing that your credit is just fine

[andi9899]

I got myself in trouble with CC's a few years ago and am slowly but surely paying it off. I have been living on cash for a few years now. I finally broke down and got a CU cc with a $5K limit. That's all I am going to commit to.

[HappyCat]

Seahorse: I agree that the hit won't be catastrophic (pun intended haha!). As I said earlier, we have no major purchases planned so I think it will recover quickly and it was over 740 last time I checked. There were many times that I couldn't pay more than the minimums but I always tried to pay at least that and on time. Baby steps right?

Andi9899: I dug out of almost $70k medical and cc debt. It's hard but you can do it. Never give up!! That finish line will come SOON!!!