Keep Them or Close Them?

I have a bunch of credit cards that I never use and never intend to use.  Some are store cards, while others are cards with the major companies.  I have three cards I use because of their rewards/low rates, yet I must have at least 10 cards total.  I'd love to close down the other cards yet worry this will hurt my credit score.  Any advice?

Ahh, The age old question. I believe it depends on if you cary a balance on them or not.  My understanding is:

High Total Available Credit = Bad
High Percentage of Credit Used vs Available = Bad

By closing your cards your total available credit will go down which is good, but your percentage of available credit being used will go up which is bad. 

If you don't have much of a balance on these cards I'd close them to get your available credit down, but if you do carry a large balance I'd keep them open.

I have three cards that I do not use but keep them anyway for a worst case scenario. I am not sure if this is the wisest move to make or not though.

If what I understand about the FICO algorithym is correct, you can't hurt your credit score by keeping them open but you can hurt your score by closing them. Jeremy hit the nail on the head with his post. Credit scoring is a strange world and almost always what is touted as good is really bad and vice versa.

I have ten credit cards and only use 2. I wouldn't close the others because of the high credit limit. Every once in awhile I'll use one of them so the issuer doesn't close the account.

Why would I do that? Simple, I have a ready source from which to borrow should an emergency arise. The financial advice of opening an emergency fund is sound. However if you don't have a lot of extra dollars to toss into that fund, it doesn't do much good.

On the other hand, if you have large unused credit limits, you have an instant large emergency fund upon which to draw should the need arise. Having used it in the past, I can say first hand thank God for large credit limits.

I am not advocating opening a ton of credit cards. I'm saying if you already have them and are disciplined with the way you use them they can serve a very useful alternative purpose.

Remember, it isn't the card that causes the financial problems. It is how you and I use the cards we have.

OK, that's my 2¢.

I suggest that you deduct your card from 10 to 4 or 5 because to 10 is very much quite very plenty.

Speaking of credit scores, is there anything to these sites like freecreditreport.com or the like?  I heard that you can hurt your score by checking it too often, but I have also heard that you are allowed to check it twice a year without penalty, so what is the deal?  Where are these people that check your credit for you making their money? Are they signing you up for strange "deals" that they put on your card? 

What is the best way to stay current on your credit score without hurting it?

Hey Jeremy, could I ask you why High Total Available Credit = Bad?

I have more cards than I actively use, but I'm not currently carrying a balance on any of them, and I think of the extras as emergency resources, as sandalwood does.

If you don't mind some advice coming directly from someone who processes credit applications every day, you definately do not want to have too much available credit. Although it certainly won't hurt your credit score, most lenders will take your available credit into consideration as a part of your debt to income ratio. Usually only when buying something like a car or taking out a 2nd mortgage but you should still becareful when carrying a lot of high limit credit cards. It also puts you at more risk for identity theft or credit fraud.

Last week I took a car loan application for some Dr. who between him and his wife made over $450K/yr. They both had credit scores of over 800 but because they had three Home Equity Lines of Credit open their debt to income ratio was over 100% and we wouldn't even give them a loan for $40K. As for free credit report dot com, your not hurting your credit score because they are not giving you your actual FICO score. They are giving you some fake score based on a soft hit of your credit which ultimately means nothing and because they want you to sign up for credit monitoring to get your "free" credit report I would not suggest using them.

I have written instructions on how to get your free credit report directly from the three major credit bureaus on my website if you'd like to check it out. It is everyone's legal right to obtain a copy of their credit once a year. All you have to do is request it from the different bureaus. I promise I don't charge any fees on my site nor do I ask you to sign up for any kind of service.

I appologize for not listing my site on my previous post: IncomeandCredit.net

cbass1017 makes some good points but I think a counterpoint or two may shed even more light on this thing we are calling too much credit.

If you don't mind some advice coming directly from someone who processes credit applications every day, you definately do not want to have too much available credit.

I don't know if cbass1017 processes credit applications daily over the Internet or works in a lender's office or is the lender. This could or could not make a difference. As far as too much available credit, do you think it is to your benefit to have the credit available should you need it or have to apply for it should you need it? Personally, I know my answer.

 Although it certainly won't hurt your credit score, most lenders will take your available credit into consideration as a part of your debt to income ratio. Usually only when buying something like a car or taking out a 2nd mortgage but you should still becareful when carrying a lot of high limit credit cards. It also puts you at more risk for identity theft or credit fraud.

Having been in the lender's seat as a mortgage banker, these words are true. However, every loan stands on its own. By that I mean when we had a person who had high credit card limits but no activity and the underwriter was citing those credit card limits as a potential problem, an explanation letter usually satisfied the questions. If it didn't, we simply placed the loan with another lender who would accept the explanation. Each lender differs in what they will or will not accept from the borrower. Overall, as a group, they have the same standards but when it comes down to making the loan, their individual criteria are different. I hope that makes sense because that is how it used to work and I bet still does.

Last week I took a car loan application for some Dr. who between him and his wife made over $450K/yr. They both had credit scores of over 800 but because they had three Home Equity Lines of Credit open their debt to income ratio was over 100% and we wouldn't even give them a loan for $40K.

this doctor and his wife must be bumbling idiots. all they need to do is join a credit union and bingo! they'll have a loan in minutes. in fact, their present insurance carrier probably has a bank branch and as long as they pay their ins. premiums, they are instantly qualified to get a car loan. heck, my ins co always reminds me I have been approved for any type of loan I wish to apply for. Mind you, I have a high limit credit card with no activity with them, all of my insurance and a money market account. I don't make anywhere near what these people make so that tells me if they were a tad bit smarter in their loan search, they would have at least two sources drooling to give them a loan.

As for free credit report dot com, your not hurting your credit score because they are not giving you your actual FICO score. They are giving you some fake score based on a soft hit of your credit which ultimately means nothing and because they want you to sign up for credit monitoring to get your "free" credit report I would not suggest using them.

This is important to remember. You don't get your actual credit score from these websites. But, you do get one that is close. Keep in mind, that is no reason to pay for a "close" score. You can get a close score at msn.com if I remember correctly. You have to go into their financial section and hunt for the link, but it is there.

I have written instructions on how to get your free credit report directly from the three major credit bureaus on my website if you'd like to check it out. It is everyone's legal right to obtain a copy of their credit once a year. All you have to do is request it from the different bureaus. I promise I don't charge any fees on my site nor do I ask you to sign up for any kind of service.

cbass1017 is correct. He does not charge fees or ask you to sign up for any kind of service. He tells you to go to http://www.annualcreditreport.com which is the site that was created after the gov't mandated free credit reports for the sheep being fleeced, oops, I mean the American consumer.

It is my opinion there is never too much information on cerdit, credit scores and the wise use of credit. Read it all and become informed and then conduct your affairs according to your personal game plan. There are no laws that say you have to put yourself in debt just because you have that ability.