Should I Consolidate My 2 Credit Cards or Keep Them Both?

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If you have multiple credit cards from the same issuer and aren’t using both regularly, you may be considering trying to consolidate the accounts in an effort to save money on annual fees.

There are some important things to ponder, such as the long-term impact on your credit score and spending power, before making that move.

During a recent episode of The Clark Howard Podcast, money expert Clark Howard was asked how best to handle this scenario.

We’ll take a look at how he answered a listener’s question and offer some additional ideas to help you make a strong decision for your particular situation.


Ask Clark: Should I Consolidate My 2 American Express Cards?

On a May 2022 episode of The Clark Howard Podcast, a listener submitted a question that may be relatable to many of you.

David from New York asked: “I have an Amex Gold card and an Amex Delta SkyMiles credit card. I don’t need both. Should I consolidate them into one or the other and which one?”

David’s problem is one many of us may have encountered as we progress in our financial lives. A card we needed a decade ago may not be the ideal fit for our wallets now. Our spending habits change over time for a number of reasons.

Here’s Clark’s response: “So, David, I hope you have other credit cards. Several other credit cards. Because when you give up that credit limit you have on one or the other of these two cards, that can lower your overall credit score. American Express SkyMiles card can have an annual fee as high as $550. We’re not talking about low annual fees with these cards. So the question would be in deciding which of these two: How much are you flying Delta?

“If you’re flying Delta at least twice a month, and you’re doing charge volume on the Amex card of many, many thousands of dollars a month, the SkyMiles card is worth having. If you don’t charge a huge volume, but you regularly check a bag, having an American Express SkyMiles card could work for you because you avoid the baggage fees on a bag.

“And that is the one additional case to be made for having a credit card from one of the full fare airlines, like American, United or Delta: to avoid the junk fees for checking a bag. I don’t even really think about that, because I don’t check bags. But if that’s a high priority for you those two factors would make the SkyMiles American Express worth it.

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“Otherwise, get rid of the Delta one and keep the Amex Gold. But remember, you’ve got to make sure that you are preserving your overall available credit so your that charge ratio, the amount you charge versus your credit limit on all credit cards, stays below 30%. If closing one of the two Amex cards won’t get you there, get a replacement Amex that has no annual fee or a replacement with another kind of card.”

You can listen to Clark’s response, which is transcribed above, here:


Important Things To Consider Before Closing a Credit Card

As Clark mentioned in the podcast segment, there are several factors to consider before taking action on closing one of multiple credit cards from the same issuer.

How Will This Impact Your Available Credit?

If you eliminate one card, it could decrease your overall line of credit significantly. This can impact your credit score by raising your credit utilization percentage.

For optimal credit score results, you want to use less than 30% of the total available credit on all of your credit cards.

An example of how canceling one card could hurt this: If you had a combined $10,000 of credit available from the two cards, you’d be fine running combined charge balances of $2,000 each month, which is 20% of your available credit. But taking one card away could reduce you to $5,000 of available credit, and suddenly that $2,000 in charge volume is 40% of your available credit.

Team Clark’s Christa suggests that you could ask your card issuer to honor the total credit line you had with two cards on a single card. This could help solve the issue and there’s no risk in asking about it before you take action.

Which Card Is The Right One To Keep in Your Wallet?

If you’ve decided that your credit utilization will be OK after eliminating one of your cards from the same issuer, the next step is picking the right one to ditch.

As Clark mentioned in David’s question about Amex cards, you need to make sure you’re keeping the card that has the most value to you moving forward.

If there are annual fees involved, it may be as simple as eliminating the most expensive option.

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But sometimes it’s a little more nuanced than that. Some travel credit cards offer perks that are worth the cost of the annual fee to select card users, for example.

So it may take a little math and analysis to come to the correct conclusion. I suggest pulling up the last 12 months of your credit card records to analyze the spending that you’ve done with each card. Many card issuers offer great spending charts, free of charge, that show your charge volume by category.

With annual fees factored in, which card is offering you the most rewards for the spending you’re doing? And if you’re running balances on your cards, which offers the best APR to keep your interest charges lowest?

Are You Following Clark’s “Noah’s Ark Rule” for Credit Cards?

This is a good time to check up on your overall credit card mix.

Clark has long been a proponent of what he dubs the “Noah’s Ark Rule” for credit card use. To put it simply, he recommends that you have credit cards from at least two different card issuers.

Clark says it is important to keep two different lines of credit open from two different companies just in case one of them decides to close or severely limit your line of credit.

“I’m thinking about this from a defensive standpoint,” Clark says. “I’m thinking about your credit score and how secure you are in that credit when the economy gets tougher — which eventually it always does.”

We have seen an increased number of consumers report that their card issuers are unexpectedly slashing credit limits or canceling cards altogether, so having a backup option is key.

So while the topic today is eliminating one card from an issuer with which you already have multiple cards, it’s a good time to think about how you’re distributing your available credit.


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