Switching credit cards, what is the most credit-friendly way?

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tiredew
 
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Switching credit cards, what is the most credit-friendly way?

Postby tiredew » Fri Nov 12, 2010 12:35 pm

Hi All,

I have two credit cards opened with a large national bank. For various reasons I would like to switch credit cards/banks. Do I have to close my current accounts and open new cards in order to do this?

If so, what is the best way to do this without hurting my credit rating.

In case it matters: I pay my balance in full every month and both cards have been open since November of 2007.

Please help me figure out what to do. I've heard that opening one card, then waiting a few months to cancel the other, then waiting a few months and repeating might be a good way to do it. Is this true?

What other suggestions do you have?


JL70
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Postby JL70 » Fri Nov 12, 2010 2:56 pm

Closing CC's often hurt your score because you kill some of the credit that is available to you, thus decreasing you credit utilization ratio, which is highly rated by FICO. As well as you credit age.

Why not leave that CC open? you can close your checking/savings account with that institution but you can leave that CC open. This will help keep your score and improve it over time.

tiredew
 
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Location: Boston, MA

Postby tiredew » Fri Nov 12, 2010 3:07 pm

This is a great and simple idea. Is there any negative to keeping cards open and not using them at all?

Or should I use them for a purchase a month or something?

Also, what will be the implications of opening two additional cards?

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Cucumber
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Postby Cucumber » Fri Nov 12, 2010 3:21 pm

Yep leave em open there's no need to close credit cards when you switch banks.
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JL70
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Postby JL70 » Tue Nov 16, 2010 11:37 am

tiredew wrote:This is a great and simple idea. Is there any negative to keeping cards open and not using them at all?

Or should I use them for a purchase a month or something?

Also, what will be the implications of opening two additional cards?


No big impact on your credit. FICO usually likes to see that you move at least one revolving account. The only negative I can think of (for your wallet) is if that card has an annual fee.

Opening new accounts has a short-time moderate imapact on your score, so it will probably lower some points, recoverying slowly over the next six months. Provided you don't miss any payments.
Last edited by JL70 on Tue Nov 16, 2010 11:41 am, edited 3 times in total.



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