Cancel unwanted Credit cards

[Sarvapindi]

2 minutes ago, kran said:

Credit cards cancel chesthe main ga two ways lo credit score meedha effect untundhi.

Assuming you have 5 credit cards, each having $10,000 credit limit, opened 2 yrs ago, and monthly usage is around $1000

1. Credit usage: Before cancelling 1 card, credit usage % is 1000/50000*100 = 2%

   After cancelling 1 card, credit usage % is 1000/40000*100 = 2.5%

   After cancelling 2 cards, credit usage % is 3.33%

   After cancelling 3 cards, credit usage % is 5%

   After cancelling 4 cards, credit usage % is 10%

   So, cancel 1 or 2 cards instead of all at once. And if you can pay the balance before the statement date, credit usage % will be very minimal. For example, if your statement date is Sep 30th, and payment due date is Oct 20th, pay around $900 on Sep 28th. Then your balance would be only $100 on the statement date. So, credit usage will be calculated as 100/50000*100 = 0.2% (10 times less than when paying after Sep 30th)

2.  Avg age of credit cards and bank accounts:

It is better to close the cards that were opened recently to increase the avg age of accounts.

Example: Lets say the age of credit cards is 5, 4, 3, 2, 1. Avg is (5+4+3+2+1)/5 = 15/5 = 3 yrs

If you cancel the latest (1 yr old) card, avg age would be (5+4+3+2)/4 = 3.5 yrs

Instead, if you cancel the first (5 yr old) credit card, average would be (4+3+2+1)/4 = 2.5 yrs

So, the avg age depends on which credit card you are cancelling.

[Peter123]

no big deal, 

[chapstick]

On 9/26/2021 at 3:42 PM, Googlie said:

I have 5-6 credits that I opened over past 2-3 years that I m not using 

can I cancel them all at once ? 
 

Heard credit score will reduce if we cancel credit card. how Much time will it take for my credit score to be up again after I all of cancel them? 
 

suggestions please 

Imo cancel bhayya.. credit history lite.. you l have mental peace..

[jambalhaatraja]

1-2 credit cards .. 1 checking account .. more than enough

put energy in increasing balance in checking account and dont was time on those stupid sign on bonus and bongulo points on CC. 

naa friend okadu unnadu...points kosam he shops extensively..points vacchaka he travels saying flight tickets cheap ga vacchai ani

now he doesnt have money to buy a home

[Galactus]

If you are not looking for credit and finding it a hassle to maintain go ahead and close , credit will take a hit though if you close that many cards or for that matter even a single card 

I have more cards than you and I try to use them for appropriate big ticket purchases depending on cashback , small purchases I do not care much , maintaining many credit cards takes some effort but it literally saves you money if you use them wisely based on benefits they bring..

 

[jays02]

3 hours ago, kran said:

Credit cards cancel chesthe main ga two ways lo credit score meedha effect untundhi.

Assuming you have 5 credit cards, each having $10,000 credit limit, opened 2 yrs ago, and monthly usage is around $1000

1. Credit usage: Before cancelling 1 card, credit usage % is 1000/50000*100 = 2%

   After cancelling 1 card, credit usage % is 1000/40000*100 = 2.5%

   After cancelling 2 cards, credit usage % is 3.33%

   After cancelling 3 cards, credit usage % is 5%

   After cancelling 4 cards, credit usage % is 10%

   So, cancel 1 or 2 cards instead of all at once. And if you can pay the balance before the statement date, credit usage % will be very minimal. For example, if your statement date is Sep 30th, and payment due date is Oct 20th, pay around $900 on Sep 28th. Then your balance would be only $100 on the statement date. So, credit usage will be calculated as 100/50000*100 = 0.2% (10 times less than when paying after Sep 30th)

2.  Avg age of credit cards and bank accounts:

It is better to close the cards that were opened recently to increase the avg age of accounts.

Example: Lets say the age of credit cards is 5, 4, 3, 2, 1. Avg is (5+4+3+2+1)/5 = 15/5 = 3 yrs

If you cancel the latest (1 yr old) card, avg age would be (5+4+3+2)/4 = 3.5 yrs

Instead, if you cancel the first (5 yr old) credit card, average would be (4+3+2+1)/4 = 2.5 yrs

So, the avg age depends on which credit card you are cancelling.

Great explanation. But simple question.

If he has 5 cards, each 10K, so the total worth of credit is 50K.

But when he keep just 1 card and cancels remining 4 cards, his credit worth is just 10K. Will that change as any bad? approved higher worth is always great, right?

Yes, the usage is also next big thing, minimum usage is best.

[kran]

10 minutes ago, jays02 said:

Great explanation. But simple question.

If he has 5 cards, each 10K, so the total worth of credit is 50K.

But when he keep just 1 card and cancels remining 4 cards, his credit worth is just 10K. Will that change as any bad? approved higher worth is always great, right?

Yes, the usage is also next big thing, minimum usage is best.

Yes, higher credit is always better. Indirectly, it reduces the usage %.