I have had credit cards from two different banks for over ten years, and have had very good service from both companies (Chase and MBNA). Recently though, Chase was a bit slimy with a credit protection offer, so I thought I’d drop them. On top of this, I just got a Working Asset credit card through MNBA, so I thought I would cancel my other MBNA card. This would mean that I will have closed both of the longstanding accounts, and would leave me with two cards (a Mastercard and a VISA) from MBNA, both recently opened. Is there any problem with this? The new cards are as good as the old cards for rates, etc., and my credit limit is more than adequate, but is there any advantage to having cards from different banks, or any problems with closing the longstanding accounts?
If you’re wondering about credit, there’s no one good answer. When determining a credit score, many factors are taken into consideration. The number of cards, how long they’ve been open, the balance of the card in ratio to it’s limit, lates and other negative dings on the card. It’s actually worse for your score to pay off everything at once, which is why most mortgage companies don’t recommend you pay off all your bills before buying a house. By closing those two accounts, it shouldn’t hurt your score too much if they still have a balance. If you completely pay them off when you close them though, it’ll probably lower your score a bit.
No. The real deal is that if you’ve carried balances and shown an ability to carry them and pay them off you are fine. What is no good is never carrying a balance…never holding a balance over and demonstrating an ability pay it over time. Paying off cards and getting new ones is good. New accounts = more credit experience, and closing old ones means a lower debt potential.
None of this is guesswork. It’s my job to understand credit scoring models
Thanks guys! I definitely have shown an ability to carry and (eventually) pay off a balance (and then charge up a new one–what fun!), so I should be okay in that regard. Any disadvantage in having both my cards from the same bank?