closing a cc?

cyndietb · May 2014

I have a credit card that I've had for a little less than 10 years I got it going into college. I never use it and if I do its paid off in full almost immediately right after. They just increased my credit limit randomly but I would really like to cancel this card because I never use it and my husband's cc gets reward points where this one doesn't get any rewards or perks. I am looking into getting the bank of america credit card for the cash rewards and strictly using it for groceries & gas just for the rewards. Is it really going to hurt my credit score or look bad if I cancel my other credit card or should I just leave it open and not use it? I have an acct on credit karma and with the credit simulator it says it will drop my credit score by almost 70 points!!!! that seems crazy to me…keep it open or close it for good? TIA!

formerlyGDaisy09 · May 2014

leave it open, but don't use/destroy the card. part of your credit score is based on how much of your available credit you use, closing an acount significantly decreases what is available to you and thus increases the proportion of your available credit that you use. that's why I often take credit line increases because then when I spend normally I'm using a smaller portion of my line of credit.

brij2006 · May 2014

Agree, don't close the card. Just don't use it.

The fact that you've had that card opened for a long time, will help your credit.

hoffse · May 2014

I can't believe I'm going to say this, but.... it depends on whether you will need credit in the next year or so.

If you are applying for a mortgage or car loan in the next 12 months, and it's your oldest card, then keep it.

If you won't be applying for a mortgage or car loan for a couple years, there's no reason to keep it open.

Honestly your credit score will recover pretty quickly. You just don't want to be messing with credit availability soon before applying for a loan.

H and I will closing several cards after entering into a mortgage, because we don't anticipating needing to get credit like that again for maybe another 3 years after that.

strickland8052 · May 2014

Why not just leave it open? You could cut it up and never use it.

Yes, it will hurt your credit score if you close it. Part of your credit score considers the time length (years) of your credit history. If you close this card, which you have had a long time, then it will be removed from your credit history and thus look like you have a shorter credit history than you actually do.

With that said, if this card has an annual fee, I might consider closing it if you don't plan on financing a house/car any time soon. If it doesn't have an annual fee, than just leave it open.

hoffse · May 2014

strickland8052 said:

Why not just leave it open? You could cut it up and never use it.
Yes, it will hurt your credit score if you close it. Part of your credit score considers the time length (years) of your credit history. If you close this card, which you have had a long time, then it will be removed from your credit history and thus look like you have a shorter credit history than you actually do.
With that said, if this card has an annual fee, I might consider closing it if you don't plan on financing a house/car any time soon. If it doesn't have an annual fee, than just leave it open.

If you don't use it at all, eventually they will close it down on you regardless.

I'm all about maintaining good credit, but the reality is that your credit score only matters if you need credit extended to you. If you won't need credit for a while, there is time to recover from the hit your credit will take by closing a card. Opening/closing hits recover in about 3 months, as I recall.

strickland8052 · May 2014

@hoffse - I didn't know that they would close it down. Very good point!

KatieCutie05 · May 2014

@hoffse is correct. I had an old account from college and when we pulled my credit for our house it wasnt even on there anymore. With zero activity and zero balance it will close on its own.

The only reason closing it would really effect your score is your debt/credit ratio... if you carry a high balance on one card and have another with zero balance you have a better debt/credit ratio then if the zero balance card was closed. Otherwise theres no reason to keep it open just for your credit score (unless you plan to need your credit checked soon).

And if i recall correctly having too many open accounts can also impact your score. i'd just close it and forget about it.

ta78 · May 2014

I have a card I only use a few times a year on something little just so it stays open. I have had it far longer than any other card, so I want to keep it on my report. For everything else we use our rewards cards.

MommyLiberty5013 · May 2014

Exactly what PPs said.

Another point I would offer you is that it's often helpful to have a back-up CC.

My personal experience is that every so often a CC gets compromised and the CC company has to issue you a new card/number. Often they mail you, or expedite ship, the new CC. For me this is an issue as I use my CC for everything. Waiting 2+ days for a new CC to arrive does not work well for me. So, I have a back up CC. When I don't need it, it stays locked up in our safe. I still use it every few months just to keep it active and pay it off in full right away.

Just nice to have a 2nd card in case.

closing a cc?

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