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Goodfarm

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I have too many credit cards. Are there negative consequences if I get rid of 1/2 of them?
Over the years, I have acquired too many credit cards. I would like to reduce the number of cards to the 4 that I use. Are there negative consequences to my credit rating if I close a bunch of accounts?

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Absolutely! First off you are going to lose open credit lines which will change your utilization rate as well as your credit profile. By reducing the amount of open credit it will adversly affect your credit score (i.e. if all 8 credit cards have a $5k limit each, by closing 4 of them you will drop from $40k limit to $20k limit) . The effect of this will depend heavily on if you currently carry a balance, to best reduce the impact of this make sure all 4 actively used credit cards are to a point that you pay them off in full each month if you don't already. Second, your amount of open accounts will decrease, which if it puts you under 22 accounts that will lower your credit score, if you will still be above 22 accounts then it probably won't hurt. Third, your age of credit could be hurt. It really depends on how old the 4 cards are that you have, but if they are cards you have had for a long time your average age of credit will drop. However, regarding my 2nd and 3rd reasons, from my understanding (and you need to double check this) since a closed account will stay on your credit for 7 years, these two categories won't affect your credit score until they fall off of your credit report 7 years from when you close the account (I have an A grade with over 22 accounts, but it is paid off loans that is currently keeping above that number I have less than 22 active accounts, so I will have to prepare to add more accounts before the paid off loans fall off). So essentially it may have a minimal change now, but it could hurt more in the long run if you don't properly plan.

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