Canceling unused/unwanted cards? General card strategy?

Discussion in 'General Discussion | Credit Cards' started by ggmm, Feb 6, 2014.  |  Print Topic

  1. ggmm

    ggmm Member

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    Hi everyone, I'm new here and just starting to really get into the miles/points game. I'm trying to figure out the best strategy for using credit cards to earn points. Here's the current situation:

    - My partner has a Credit Union-related card that earns Scorecard rewards that she's had for 20+ yrs,
    - We have a joint CapitalOne VentureOne -- started out with a different CapitalOne card probably 10 yrs ago, upgraded to the VentureOne 2-3 yrs ago when we started to have the time/energy/money to travel. I'm the primary account holder
    - We have a joint Chase Hyatt card (she's the primary account holder) that's less than a year old. She spontaneously signed up when booking a Hyatt room for for a conference, and it's actually been great. Had two free nights in a lovely Hyatt in Montreal, and have a couple more free nights to use.
    - We also have a Chase Slate (I'm primary), and a few miscellaneous dept store cards that we never use.
    - Just signed up for the Chase Sapphire Preferred (with her as primary, me as authorized user). It hasn't arrived yet.
    - Mostly interested in airline miles (or points that can be used as such) -- we don't have any hotel chain loyalty, and actually tend to prefer non-chain hotels. And we've already got the Hyatt card (planning to keep it, though I'm going to call and try to get them to defer the annual fee).
    - United, US Airways & JetBlue are the primary airlines that fly from our little airport to the places we want to go.

    We both have "good" (750s-760s) credit according to Credit Karma, but it's been pointed out to me that that is not a really accurate source. We are thinking about buying a second home in the next couple of years, so maintaining decent credit is important.

    So my questions:
    - My inclination is to cancel all the unused cards. Is there any benefit to this? Any disadvantage? I have read that the % of total credit used is important to credit score -- so having lots of unused credit seems like a good thing? And yet, if I were a creditor, looking at someone with the option to suddenly go 10s of 1000s of $ into debt tomorrow (aw yeah, JC Penney spending spree!) would not be appealing to me.
    - Any thoughts on next card to apply for? Since CSP points can be used for United flights, I had been thinking about a non-United card -- but maybe it's good to focus on one program and really load up? And AA and USAirways miles are now interchangeable correct? So a Citi AA card might work for me even though I don't fly on AA often? As a rule, does it make sense to double up on all "good" cards -- i.e. should I go ahead and apply for a CSP even though my partner has one?

    I know that's a lot of questions! Forgive my newbie ways, and please feel free to point me to threads where all of this has been addressed. Any input/feedback most welcome! Thanks!
     
  2. daninstl

    daninstl Gold Member

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    I'm not expert like many on here but I do know (have been told and read up on) that many store type credit cards do have a slight negative impact on FICO scores. Apparently FICO formulas think, why would you need to have a Kohls or Sears, etc. card if you can get a "real" credit card like a Visa or MC. Also secondary lenders that do cash loans (think the old HFC or American General) have a negative impact as well for the same reasons. So I guess my limited advice would be to keep a couple of the oldest cards as the they will help your length of credit history but dump the store cards. You can send them a simple boilerplate letter to cancel and they will. I prefer to get response in writing as you should never trust credit card companies.
    Oh and I'm in the middle of buying a new home. When you get close to this event stop churning cards about 12 months before and try to avoid any hard pulls possible for that year or at least 6 months prior. Also be careful if you buy a car or start the mortgage shopping as it is not unusual to have a car dealer or mortgage dealer send your app out to a bunch of lenders and they all do a hard pull. Typically the credit bureaus will show this as a single event but not always.
     
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  3. gconnery

    gconnery Silver Member

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    Having extra credit is a good thing apparently. Yes I think that's weird too. But you don't want a large percentage of your available credit to be in use when a pull is done, so the less you use and the more you have access to the better. So cancelling cards for no reason is not a good idea generally.

    You want to keep one or two credit cards that you've had a long time, as they establish your credit age, so I'd think twice before cancelling your oldest card(s).

    I wouldn't cancel anything that has no annual fee. And with any card that does have an annual fee I'd wait until it was almost time to pay the fee before cancelling.

    You don't want to lose the credit line when you cancel, so you'd rather keep it and then trade it in by offering to close the older card on the reconsideration call for a new card rather than just calling and canceling the card. However, you may be able to have them move the credit line when you call to cancel if you have another card with that issuer when you call.

    You can also often change a credit card from a fee card to a no annual fee card rather than canceling it. If that's an option you may want to do that. Depends on whether you want to get the bonus for the NAF card, whether having the NAF card will prevent you from applying for the card you want etc, but its an option.

    Don't think about the cards as "shared". They aren't. The primary is the only one who matters. The authorized user can credit spend to that account but that's all. The card doesn't affect their credit score. So she has a Chase Hyatt and you have a CSP. Period. She can still get a CSP and you can still get a Hyatt.

    Since you just applied for the CSP, you should wait a while before hitting up Chase for another personal card. At least 3 months and maybe 6. Since the United cards are Chase that could affect your choices. In general though you want to have "enough" points in a given account for it to be useful. 50,000 miles may not get you even one trip for the two of you, it probably won't. So over time you'll want to either put spend on the cards to get more miles or apply for more cards in your chosen programs.

    American and US Airways haven't merged their programs yet, but yes eventually any miles earned on AA will turn into US Air/AA miles. So you could definitely go for an AA card--a 50K offer for one of the Platinum VISAs, the current 100K offer for the Executive, or whatever is the best current offer for the Gold MasterCard.

    You could also of course go for the Barclay's US Air MasterCards, which since those will be disappearing soon (in that new cards won't be issued anymore, we don't know exactly when this will happen, but presume in the next year), you might want to focus on first. You can get 40,000 miles on first purchase on a US Air card and they are definitely churnable. Just got immediate approval for my 2nd and my wife's 2nd with no phone call. Of course you could do both a Citi and a Barclay's on the same round. No reason not to really.

    A CSP is a great card to keep long term, and isn't churnable, so you might want to make sure you each get one of them soon.

    Another program you might consider is Amex SPG, since SPG points are convertible to airline miles with a bonus (20,000 SPG gets you 25,000 miles in United).
     
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  4. Sfmom

    Sfmom Silver Member

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    Hi!

    I'm relatively new myself but I wanted to encourage you to consider the Citi Aadvantage cards. They give you a lot of miles and apparently you can reapply every couple of years. My husband and both applied for the 50K and the 100k and the US Airways card. Between that and some really strong online shopping promos they had in the fourth quarter we are on track to have 370,000 (440,000 post merger). We almost never fly American but are looking forward to a business class international trip hopefully next year. My plan is to alternate with UA - big UA redemption in 2014, American in 2015, UA in 2016, etc.
     
  5. ggmm

    ggmm Member

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    Thanks everyone!
     
  6. boondr

    boondr Gold Member

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    Almost everything but United as it is 2 SPG=1 UA mile for some reason.
     
  7. satman40

    satman40 Gold Member

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    It is best to read between the lines, apply, if they give you a low credit limit, it is done for a reason...

    They make money with every card, it is about performance and production.

    Banks love to say yes,
     

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