Combining Credit Card Accounts Review
Author: GUEST
Posted: Fri Jul 02, 2004 11:10 am
Post subject: Combining Credit Card Accounts Review
I have 2 accts with MBNA (limits of 25000 and 5000)
I have 2 accts with CHASE (20000 and 13000)
I have 2 accts with AMEX (20000 and 24000)
If I combine Chase to one ACCT (keeping the older one open and closing the NEW) thus creating 1 big acct with a limit of 33,000 and doing the same with MBNA and AMEX would this help or hurt my score?
I'd be losing "3" good tradelines by doing this.
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Author: Polonius
Posted: Sat Jul 03, 2004 10:41 am
Post subject: Combining Credit Card Accounts Review
If you do that, your utilization remains the same overall, but your utilization on an individual card can go down. That can help raise your score. Also, closing off newer accounts will raise the average length of tme you've had your remaining accounts, and that will help the score a bit too.
BUT combining the cards will get you fewer special offers because you'll be in fewer marketing categories. I'm always getting special balance transfer rates on 3 Citibank cards and none on my fourth, for example.
And what makes you think the banks will let you combine the cards? Typically, the cards have different terms/fees/rewards. If you have several cards because banks merged, the systems may not even allow the accounts to be combined. My Mellon Bank cards became Citibank cards a few years ago, but I still can't link my Citibank online accounts to the Mellon Bank cards even though they have the Citibank name on them now.
I've got 4 AmEx accounts now--a Gold account, a Costco Rebate account, a "Blue for Business" account, and an Optima card. All have different terms, rates, fees and special features. I wouldn't want to combine them.
Also, consider this example. You have a $5,000 card and a $10,000 card with one bank, owing nothing. You do a $3500 balance transfer on the first at 2.9% and then stop using it and start using the other for regular purchases. You extend payments on the first and pay off the second in full each month. So you wind up paying the 2.9% on the $3500.00 as planned. But if you combined the two accounts, you'd owe the money on a single account. Your purchases would be on that account too. You'd make the same payments, but they'd be credited against your low-interest balance transfer. You're no longer paying off your balance on your account in full each month--you've lost your grace period. And your usual purchases would then be charged at your usual purchase rate (10%? 18%?). Net result is that you'd lose money by combining the accounts, because you can't segregate your use of the accounts as you could do when they weren't combined.
All things considered, I'd recommend not combining the accounts.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Fri Jul 02, 2004 11:10 am
Post subject: Combining Credit Card Accounts Review
I have 2 accts with MBNA (limits of 25000 and 5000)
I have 2 accts with CHASE (20000 and 13000)
I have 2 accts with AMEX (20000 and 24000)
If I combine Chase to one ACCT (keeping the older one open and closing the NEW) thus creating 1 big acct with a limit of 33,000 and doing the same with MBNA and AMEX would this help or hurt my score?
I'd be losing "3" good tradelines by doing this.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Polonius
Posted: Sat Jul 03, 2004 10:41 am
Post subject: Combining Credit Card Accounts Review
If you do that, your utilization remains the same overall, but your utilization on an individual card can go down. That can help raise your score. Also, closing off newer accounts will raise the average length of tme you've had your remaining accounts, and that will help the score a bit too.
BUT combining the cards will get you fewer special offers because you'll be in fewer marketing categories. I'm always getting special balance transfer rates on 3 Citibank cards and none on my fourth, for example.
And what makes you think the banks will let you combine the cards? Typically, the cards have different terms/fees/rewards. If you have several cards because banks merged, the systems may not even allow the accounts to be combined. My Mellon Bank cards became Citibank cards a few years ago, but I still can't link my Citibank online accounts to the Mellon Bank cards even though they have the Citibank name on them now.
I've got 4 AmEx accounts now--a Gold account, a Costco Rebate account, a "Blue for Business" account, and an Optima card. All have different terms, rates, fees and special features. I wouldn't want to combine them.
Also, consider this example. You have a $5,000 card and a $10,000 card with one bank, owing nothing. You do a $3500 balance transfer on the first at 2.9% and then stop using it and start using the other for regular purchases. You extend payments on the first and pay off the second in full each month. So you wind up paying the 2.9% on the $3500.00 as planned. But if you combined the two accounts, you'd owe the money on a single account. Your purchases would be on that account too. You'd make the same payments, but they'd be credited against your low-interest balance transfer. You're no longer paying off your balance on your account in full each month--you've lost your grace period. And your usual purchases would then be charged at your usual purchase rate (10%? 18%?). Net result is that you'd lose money by combining the accounts, because you can't segregate your use of the accounts as you could do when they weren't combined.
All things considered, I'd recommend not combining the accounts.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 1:19 PM
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