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Comment by ams6110 | Hacker News Reader

I have half-a-dozen credit and debit cards. Several reasons:

1) Your credit score is negatively impacted if you close a credit card account.

2) Specific cards have specific benefits. For example my insurance company issues a credit card and if I use that card when I rent a car, I not only get automatic collision damage insurance (pretty standard on many cards) but also coverage against "loss of use" charges and other risks with rental cars that many other credit cards don't offer.

3) Some places don't take all cards. My AMEX card gives me hotel points that I use a lot but AMEX isn't accepted everywhere.

4) Many benefit programs have debit cards that are to be used for specific purposes. My HSA has a debit card, but I can only use it for medical expenses and prescription drugs.

Because the need for a particular card can be somewhat unpredictable, (and just to avoid losing them) I end up carrying about six cards in my wallet at all times.

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To 1, it actually isn't or at least not as much as you might think. Relevant factors are utilization and average age of your credit accounts, going back 10 years; an account doesn't stop aging when you close it, and it doesn't fall off of your report until 10 years from the closing date. If closing an account decreases your amount of available credit enough that your utilization spikes (over 20%), then you should leave it open. Otherwise it's fine.

Another note on that, if you normally spend more than about 10% of your credit limit across your cards each month, get another card or get one of them to raise your limit. Debt utilization ratio higher than that can also drop your score. Sign up for CreditKarma and keep an eye on it to get the best rates and rewards.

Edit: another alternative is to manually pay your bill every other week to keep the utilization ratio down.

> Your credit score is negatively impacted if you close a credit card account

What happens if you raise the credit limit on your remaining cards to eat the loss of total credit?

I don't know the answer. I had assumed that it was the act of closing the account that was viewed as a negative and not the reduction in the aggregate credit limit. But I could be wrong.

My wife is a manager of a bank branch and her brother is a credit analyst at another bank, and I've been told the reason it impacts your credit is because you now have less credit available to you, and you're likely now using more of your available credit.

If you have $50 available on one card and $50 on another card, you have $100 of available credit. If you close one of the cards, you now only have $50 of available credit. If one card is maxed out and the other is empty (because you're about to close it), before you close it you are only using 50% of your available credit. Once you close it, you're now using 100% of your available credit, which looks bad.

The number of cards open is less important than the average age across your cards.

https://www.creditkarma.com/article/credit-score-factors

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