Should Low Credit Limit Credit Cards Be Closed?

Posted On: May 28, 2006

Author: transpose9
Posted: Mon Mar 13, 2006 5:37 am
Post subject: Closing low limit cards?

Hello, I’m a college student with 4 credit cards — 3 were opened at the same time. I’ve been thinking about closing the Chase and Amex Student cards since I’ve had no luck getting credit line increases for those particular cards. Also, I have paid every balance in full each month. Should I close those cards and open new accounts with higher limits? What would you guys suggest? Thanks in advance.

Opened Jan 2005:
1) Chase Visa Toys R Us (400 limit)
2) BOA Visa (2000 limit)
3) Amex Student (500 limit)

Opened Aug 2005:
4) Amex Blue Cash (9200 limit)

Quote:
Should I close those cards and open new accounts with higher limits?

No–and yes. Leave the cards open. Apply for new accounts. The two decisions are NOT related.

I concur with Polonius. I assume all your cards have no annual fee? I’d say the main reason to close an account would be if there was an annual fee. Barring that, what new cards are you considering applying for? If you are happy with the cards you currently have, since you’ve had three for a year, you may consider calling and asking for a CL increase. Assuming you have not had many hard pulls lately on your credit report and no other black marks, I would think that a CLI would not be out of the question. However, ask if they can give you a CLI w/o doing a hard pull on your credit report.

The advantage to leaving the accounts open, assuming these are your first credit cards, is that it gives you a longer credit history down the line. I still have my first CC. If you do get a better CC for better rewards, I’d suggest making a small purchase to your old card(s) every so often (6 mo or so) to keep them active and reporting to the CRAs that you pay on time. That will help your credit score over time.

transpose9 wrote:
Hello, I’m a college student with 4 credit cards — 3 were opened at the same time. I’ve been thinking about closing the Chase and Amex Student cards since I’ve had no luck getting credit line increases for those particular cards. Also, I have paid every balance in full each month. Should I close those cards and open new accounts with higher limits? What would you guys suggest? Thanks in advance.

Opened Jan 2005:
1) Chase Visa Toys R Us (400 limit)
2) BOA Visa (2000 limit)
3) Amex Student (500 limit)

Opened Aug 2005:
4) Amex Blue Cash (9200 limit)

Assuming that Amex Student is the Blue credit card, consider to switch to the regular Blue credit card. It would help a lot.