Ask Terry Questions How much is too much available credit?

How much is too much available credit?

By Terry Savage on April 20, 2013 | Credit/Debt

During my middle years, I carried a lot of credit. Because I was never late with a payment and always paid more than the minimum, I got incredible offers to lock in low rates on balance transfers which I did and eventually paid everything off. Now I have one card at Chase with a $10k limit that I use regularly and pay off in full every month. No annual fee and I get Amazon points. I have another card at Chase with a $42k limit (the result of combining 2 accounts) that hasn’t been touched in years, but Chase hasn’t closed it on me either. I have a third card through Amex that also hasn’t been touched in years. It has a $21.1k limit and no annual fee. This one is coming up for renewal next month. Should I close it? Should I keep it open and close the $42k Chase card? Close both? What’s best for my credit score? The last time I checked, it was 790. I’m 65, happily working, and expect to be so for the next decade at least. I can’t envision needing or wanting to use the money. Thank you, Terry.

SAVAGE SAYS: First, my congratulations on how well you’ve managed credit over the years. You’re a great example for all my readers. I’m just guessing that at your age you aren’t about to apply for much more than a car loan. But maybe you’re thinking of buying a retirement home?

I think you should leave things as they are — unless you are paying too much for each card. I never like to pay a lot for a card, since I find most people don’t use many of those features that make some cards so expensive! But perhaps you should make a charge, and pay in full, on each of these cards once or twice?a year — just to keep them active. They will report your payment history to the bureaus, and it will show a wider, more diverse, but still excellent use of credit.

You have a great credit score, so you don’t need to do much to maintain it!




a personal
finance question