Somehow I’ve ended up with eight different credit cards. EIGHT! How did this happen? Well, I know exactly how it happened. Ten years ago my dream was to be a world traveler, and I decided having a travel rewards credit card was a good way to do it. And I was right. I racked up so many points it basically paid for multiple flights and other travel expenses. The Capital One Venture card is my favorite for travel rewards. I enjoyed it so much that I decided to open another one – the Chase Sapphire card. Thirty countries later and I’m ready for a break from traveling – on to new adventures…
Which brings me to how I ended up with a Lowes Consumer card, a Lowes Business credit card, and a Home Depot card. You see I’m remodeling a house, and having these credit cards earns me points and discounts. There are definitely perks to having credit cards at home improvement stores when you’re in the middle of multiple projects. And then of course there’s the credit card through my bank which I opened to make it easier to pay for some of these projects. After racking up a large amount of debt, I went on a quest to pay it off and realized I could transfer debt from the high interest credit cards to a 0% APR credit card, and that’s how I ended up with the Bank of America and Discover cards.
I’ve been pretty diligent in paying off the debts. In fact, I’ve done such a good job that by the end of this month I will have paid off every single one of them except the Bank of America which has about $3,000 left. Not too bad considering I started out with about $10,000 in credit card debt across four of these cards. But now I’ve got eight lines of credit open, and I don’t really like that. I tried closing accounts before, but it requires a phone call and both times I got talked out of it. Once I tried to close, and the agent offered to wave my annual fee if I kept it open. I figured why not. The other time a different agent persuaded me not to close because it would hurt my credit. But I don’t need eight lines of credit. Is it really going to hurt my credit that badly to close some of these?
There are reasons a person might close a credit card according to BankRate. These include if “you’re unable to use credit responsibly, you’re separating from a partner and need to close a joint account, you have a credit card with a high annual fee, you have a store credit card with a store you no longer shop at or you want to transfer a balance to a card with an intro APR offer.” However, closing an account for no good reason could affect your credit utilization ratio and hurt your credit score especially if it’s one you’ve had for a long time.
After looking at my options this is what I’ve decided. Since closing older credit cards can have a negative impact on my score, I’ll keep the travel rewards for now, and who knows, maybe I’ll catch the travel bug again in the future. The home improvement cards have no annual fee, and it’s likely I’ll have future projects or even a different house, so I see now reason to close them. I’ll likely close the two balance transfer cards and keep the rest, but that’s still more lines of credit than I like to have open. But if it’s in the interest of keeping a good credit score, I’ll just hold on to the others for now. And apparently, it’s also a good idea to pay off all balances before closing any accounts, so I’ll wait until the debt is completely gone. What are your thoughts on credit cards? Feel free to share them in the comments!