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Hey folks,

I have a bunch of questions regarding a new credit card that I applied for and was approved with Amex. I have been doing business with Amex since 2005 and recently applied for the Starwood Preferred Guest (SPG) card, for which I was approved with a $2000 line of credit. I also have the Amex Clear and Amex Blue with pretty good lines of credit. I feel that I will use the SPG card the $2000 limit that I was approved for would make it appear like I was making use of at least 80-90% of the $2000 limit. I called Amex and asked them what could be done about this situation since I didn't want my credit score to be affected adversely. I am aware that opening a new CC will affect my credit score to a certain extent. I have no debt as of right now and plan to pay off my balance in full every month.

I called Amex and the rep told me that Amex could "reallocate" the line of credit that I have on the other 2 cards and put it on the SPG card, which sounds like an OK deal to me. However, since that conversation I've been wondering what kind of impact this "reallocation" will have on my credit score. I have also been thinking about closing my Amex Blue and Amex clear accounts and just having the SPG card with Amex.

I'd be grateful if you can share your thoughts/opinions/suggestions with regard to my situation/question.

Many thanks in advance!
Coolnewbie
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coolnewbie,

You wrote, I called Amex and the rep told me that Amex could "reallocate" the line of credit that I have on the other 2 cards and put it on the SPG card, which sounds like an OK deal to me. ...

I'd be grateful if you can share your thoughts/opinions/suggestions with regard to my situation/question.


It seems reasonable to shuffle the credit lines around if you think you're going to prefer one card over another, but you still want to keep them all open. I think the account rep advised you well.

Reallocating credit lines is a fairly common practice. I've done it when I've had two cards from the same issuer and wanted to close one. Especially if you are carrying a balance, consolidating credit limits offers a way to minimize the hit from closing an account.

- Joel
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I called Amex and the rep told me that Amex could "reallocate" the line of credit that I have on the other 2 cards and put it on the SPG card, which sounds like an OK deal to me. However, since that conversation I've been wondering what kind of impact this "reallocation" will have on my credit score. I have also been thinking about closing my Amex Blue and Amex clear accounts and just having the SPG card with Amex.

Reallocating credit between different credit lines can be a good way to get your credit lines aligned with your planned spending patterns.

If you reallocate (rather than close), just be sure to keep enough credit on Amex Blue and Amex Clear so that the usage you have on those accounts won't be more than 50% or so in any one month.

If you close the Blue and/or Clear accounts, be sure to have the credit lines allocated to your SPG card as part of the closure process, so you don't lose that credit availabilty.

If your Blue and Clear cards are some of your older accounts, and you are concerned about potential hits to your credit score, you may want to close one at a time, starting with the newer one, check your credit score to see what changes have occurred, and then decide whether to close the other one.

Before you take the step of closing your Clear and Blue accounts, I would also suggest you make sure that you evaluate any annual fees that you will be charged on the SPG card vs. the other cards. The terms and conditions page I was able to find on AmEx's website https://www304.americanexpress.com/personal-card-application... shows a $0 fee for the first year, and $65 a year after that for the SPG card. Do your Clear and Blue cards have annual fees? (some do, some don't - depending on the rewards you have and when you got the card) So if you aren't going to want to pay the SPG fee in a year, you may want to keep one of those accounts open to rellocate your credit line back to, if you end up closing the SPG card.

AJ
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AJ/Joel,

Thanks again for your posts. I feel more comfortable now after hearing that reallocating is not so bad after all. Amex was able to reallocate $10K of the limit from my Clear account to the SPG, however, to reallocate the limit from the Blue it looks like they'd have to check my credit history again. I'm assuming this because the agent told me that it would take Amex 7-10 days to reallocate the credit from the Blue.

I haven't yet checked my credit scores after opening up the SPG card. I will do so within the next week or so and see how its affected my FICO.

I did look at the annual fee. I believe with the way I'll be using the SPG card it will pay for itself, but I appreciate you pointing that out AJ!

Thanks again for your time and patience in answering my questions!
Coolnewbie
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