Will Merging Two Cards From the Same Company Affect the Credit Score?

Your credit score is a number summarizing the activity in your credit report; Any financial activity reported on the credit report affects your scores, including merging or combining cards. Even if you have two credit cards from the same company, each account appears separately on your credit report. The trick is to merge the cards in a way that preserves the positive attributes of each account. The financial advice service Bankrate reports that it is difficult to know exactly how many points any given action adds to or subtracts from to your score.

Your Credit Report

Lenders and creditors can opt to report any number of transactions to credit rating agencies, who compile this activity into a credit report. Agencies then use equations to condense the activity in the report into a credit score. Your credit report includes all open credit card accounts, mortgages, car loans and other loans, as well as open accounts, late payments, defaulted or delinquent accounts, inquiries into your credit score, usually during the last seven years and any bankruptcies in the last 10.

Scoring Factors

Lenders look for responsible management of credit. Having access to credit, especially a lot of credit, and using it well results in a high score. With credit cards, the three major factors are extent of credit history (how long you have been using credit), credit use ratio (the percent of available credit that you use -- ideally under 10 percent) and timeliness of payments. When you merge cards, try to preserve the positives as they appear on your credit report.

Merging Cards

To maximize the benefit to your credit report, see if you can preserve the oldest card's activation date so as to preserve the extent of your credit history and opt for the highest credit limit. Higher credit limits lower your credit use ratio -- as long as you do not end up spending more because of the increased availability. Talk to your credit card company about your options when merging two accounts; Options vary among companies.

Tip

What you see as an attractive feature in a credit card -- low interest rates, low fees and purchasing perks -- may not be what matters on your credit report. Try to avoid losing your oldest card activation date -- length of credit history accounts for 15 percent of your score. If you are trying to increase your score, consider forgoing the perks for the time being. Finally, if you have problems with debt, do what makes the most sense in the long run; if a card with low rates and a lower credit limit keeps your spending in check, it will help you more than a temporarily high credit use ratio.