BACK

Keeping Score

Will combining many credit limits onto one card help my credit score?

If your issuer is willing to do this, your score could benefit. But having only one high-limit card has drawbacks

Summary

If your card issuer is willing to move credit limits from new cards you intend to cancel to an older one you plan to keep, you could see some scoring benefit. But there are better ways to improve your score, and having only one card with a high credit limit has potential drawbacks.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Dear Keeping Score,

I have a few cards with one bank, all I don’t use except one. The card I use has 10 years of history. All the accounts have a $0 balance and no annual fees.

Would it be advantageous to close the newer cards (under two years of age) and transfer the credit lines on those cards ($30,000) to the older card that I use all the time and had for 10 years?

The bank has confirmed they will transfer the credit lines. Was thinking this would help my average age of accounts. Also, possibly, only having one card with a $50,000 credit line would be better than four cards with a total of $50,000 in credit. Thanks in advance! –D

Check out all the answers from our credit card experts.

Ask Steve a question.

Dear D,

Let’s start with why did you get four cards from the same issuer? Has the reason for getting four changed?

If it was for rewards, are you sure you won’t lose them by closing the card? For example, I get a free hotel night and elite status with one of my credit cards. Closing it would forfeit the night and status. So first, be sure you know the consequences of canceling.

Next, if your action will leave you with only one credit card, I suggest you look to open at least one additional card. Having only one card available can be problematic if the card is refused or compromised for any reason, or lost while on vacation. I like to think of a spare card like having a spare tire in case of a flat.

Of course, if you open a new card, you will have a hard inquiry that will drop your score slightly for a few months, but then it will recover.

A final consideration is that if in the future you decide to part ways with your $50,000 card issuer, chances are you’ll end up with much less spending power on your new card.

See related:  How I canceled one of my Chase cards – and saved my score

Closing your cards shouldn’t hurt, but it may not help much, either

Aside from the above, I don’t see a major problem with doing what you suggest, but I don’t see an advantage either. The main reason for not closing accounts is that you generally lose the credit line, but since you have already checked with the bank and they are willing to transfer the lines to your oldest card, this isn’t an issue.

When it comes to your credit score, the actual number of credit cards doesn’t factor into the FICO score. What counts is the length of your credit history (15 percent) and your credit utilization ratio (30 percent), both of which you will retain by consolidating the cards into one.

There may be a slight advantage for your FICO score from making your individual account utilization the same as your overall utilization number but it would be small, if any, as your total utilization ratio will remain the same. And, as you said, it would improve your average age of accounts, which is part of the credit history length scoring factor.

In general, all you need to do to maintain a great score is to pay your bills on time, keep your utilization low, maintain a relationship with a creditor for an extended time (10 years with one creditor is a great goal) and have a mix of credit types.

You haven’t told me if you have other types of debts, but good examples of a credit mix that will generally be good for a credit score are having a mortgage or any type of installment loan, like a furniture or car loan.

You don’t say what your current score is, but if it’s not exactly where you would like it to be, my suggestion to boost it would be to look at your mix and see if you can comfortably add something.

See related:  How to cancel a credit card without hurting your score

Be careful with all that credit

Having a credit card with a large credit line is nice, but I would caution you to be extra careful with any spending decisions you make once the transfers are complete.

When I say you need to keep your utilization low, I am talking about keeping overall spending between about 5 percent to 20 percent of your available credit in one billing cycle. With a $50,000 limit, 20 percent equates to $10,000 and that is a lot!

Remember, beyond all the calculations and algorithms, a higher amount of debt equals a higher default risk profile, which equals a lower score.

If you have the funds to pay that amount off each month, all the better. Just because you have $50,000 at your disposal does not mean that you ever want to get close to that max. But it’s comforting to know you can in an exceptional situation.

Remember to keep track of your score!

What’s up next?

In Keeping Score

Poll: Fewer than half of American kids under 18 receive an allowance

A new CreditCards.com poll of U.S. parents with children under 18 revealed only 40 percent of those kids get an allowance. And 1 in 4 respondents said their parents gave them no education on money topics while they were growing up. Find out why giving children allowances is important, in tandem with educating them about money matters.

Published: June 12, 2019

See more stories
Credit Card Rate Report Updated: July 17th, 2019
Business
15.61%
Airline
17.59%
Cash Back
17.68%
Reward
17.58%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.