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$143,600

January 6th, 2009 at 06:02 pm

Yikes!!! I am shocked at how much I could theoretically buy on credit. Today, out of curiosity after reading monkeymama's post I decided to add up the credit lines on my credit cards, something I've never done before. I recently had a card closed by Cabela's because of non-use, so it also makes me wonder if I should close some accounts before another CC company decides it does not want/need me as a customer.

I only carry cards #1 and #2 with me, the rest are in the safe-deposit box. Since I pay off the cc bills monthly to avoid finance charges, I don't pay attention to the limits. And, I manage bills online, so I do not get any paper statements. Card #1 has a fee, the rest are "free."

I can see why it is so easy for people to sink into CC debt, especially if a financial crisis arises in one's life. Having this much credit could be very dangerous:

CC#1 - Airline Visa $35,000 LOC (most frequently used card, has a fee)
CC#2 - AmEx $27,800 LOC (used for Costco)
CC#3 - MBNA MC -$14,800 LOC (no longer used, opened 25 years ago)
CC#4 - LLB Visa $5,500 LOC (provides free shipping, rarely used)
CC#5 - Amazon Visa $12,500 LOC (provides free shipping, rarely used)
CC#6 - Chase Visa $8,000 LOC (provides gas rebate, rarely used)
CC#7 - Capitol One Visa $20,000 LOC (provides miles, rarely used)
CC#8 - Schwab Visa $20,000 LOC (rarely used, came with the account)
CC#9 - Macy's - Unable to determine LOC limit (rarely used)

I use the Macy's card occasionally when they have an additional 15% off promotion if you use the card (then pay it off when the bill comes). The LL Bean card gives free shipping and monogramming and this is nice at Christmas so I may keep it.

Apparently having all these cards has not hurt my FICO credit score but it still may be time to close some of them. First I have to investigate if there is an disadvantage to closing these accounts vs. keeping them open, even if I am not using them. I am not sure about the impact of closing accounts on your credit score. Does anyone know about this?

BTW, these numbers do not include dh's cards. He has 3 or 4 but only keeps one in his wallet and he uses it regularly for the rewards, but also pays it off each month.

7 Responses to “$143,600”

  1. monkeymama Says:
    1231266154

    The funny thing I was wary to open a 5th card while I had 4 cards open with about $40k total credit line.

    Reading your post makes me think it's probably moot. (Also reminds me ID thieves were able to open, and max out, $30k in credit in the blink of an eye)

    Holy Cow!

  2. LuxLiving Says:
    1231266218

    If nothing else I'd at least call and have them lower the balance limits to smaller. If someone stole your identity they could have a heyday!

  3. Ima saver Says:
    1231270263

    Don't close the accounts. Just put them away and don't use them. closing them will affect your credit score.

  4. Analise Says:
    1231272230

    Thanks, Ima... I thought I remembered reading somewhere that closing accounts can have a negative impact on credit scores. I don't want my scores to go down.

  5. Koppur Says:
    1231273738

    One way they look at your FICO store is your debt to available credit ratio. Having that much in available credit ups your FICO score, so I imagine closing them will lower it. BUT, where you don't carry any balances, maybe it won't.

  6. monkeymama Says:
    1231278445

    I have to disagree. If you have a good score, closing a chunk of those cards won't make a hoot of a difference. Conventional wisdom is that having so much available credit is also bad for your score. But when you have a good score in the first place, it is hard to hurt it with too much or too little credit.

    My experience is closing all but one card (including erasing first 10 years of credit history) did not affect my score more than 10/20 points. When you have an 800 score, who cares. "Excellent credit" is anything over 720 or so. I don't think you could do anything at this point to lower your score 100 points. Wink Well, besides non payment and late payments and stuff like that.

  7. Mr. GoTo Says:
    1231304174

    If you are a baby boomer focused on retirement, eliminating debt and simplifying your financial life is much more important than our credit score. Do what is best for your life and not what the credit industry is trying to manipulate you into doing.

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