I have 8 credit cards and a 650 score, but only want 3. How should I narrow the choices?

A Reddit user is wondering if he should close some of his credit cards, but he’s not sure how to narrow down the choices.

He currently has a total of eight cards, but he wants to have three at most. He’s also been working on paying down his balances, and he has a 650 credit score right now, but he is hoping to improve that score once his debt payoff is complete and as he continues with his responsible borrowing behavior. 

So, how can the poster pick which cards are the best for his needs?

This is how to pick the best credit card

When selecting the right credit cards to keep in your wallet, here are a few key things to consider:

• Credit limit: Cards with higher credit limits can be good for your credit score. That’s because your credit utilization ratio is an important factor in the credit scoring formula. You’ll ideally want to make sure you don’t use more than 30% of the credit available to you, and that’s easier to do if you have a higher credit limit. 
• Fees: Annual fees can sometimes make sense, but only if you get generous perks and a great rewards program. If you are paying fees for cards that don’t offer these benefits, then the card may not be worth keeping. 
• Rewards: You should have cards that are well-aligned with your spending. The best cash back cards will offer either generous cash back for all purchases or bonus rewards for specific kinds of spending. For example, if you spend a lot at the grocery store, look for a card offering a bonus 5% back on groceries. You may also want to supplement that with a different card offering 5% on gas, and then a general-purpose card that provides 2% back on other purchases. 
• Cardholder perks: Some cards offer perks like extended warranties. or car rental insurance. Look for these added perks to get the most value from your cards.

In this particular case, the Reddit user has several cards that other posters indicate are from predatory lenders that charge high fees. The poster should give those up, sticking with the cards offered by trusted providers that offer these other benefits mentioned above.

Is it a good idea to close old cards? 

Since the poster has eight cards but wants to go down to three, he’s in a position where he would have to close down old credit cards he has open. As a general rule, you typically don’t want to do that, as closing old cards can hurt your credit score by lowering your average age of credit and by affecting your credit utilization since you’ll lose the available credit those cards offered.

However, since some of the poster’s cards are either secured cards that require him to tie up money for a deposit or are cards that require him to pay high fees for no real benefits, this is an exception to the general rule. The poster should consider asking the creditors he holds secured cards with if he can convert them to unsecured, and he should close down the other cards that are charging him a lot. 

While his score may take a short-term hit as he closes the costly cards, he can hopefully rebuild his score quickly through finishing debt paydown and using his cards from trusted lenders responsibly.  As his credit score improves, he’ll also have new options for high-quality cards that he can apply for.

While he shouldn’t open too many new cards at once because that can also damage your credit score, applying for one or two good ones over time could give him the perfect three cards to maximize his rewards and help him continue on his credit-building journey.