Credit score and closing old cards

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Homrou
Posts: 4
Joined: Fri Apr 14, 2017 1:58 pm

Credit score and closing old cards

Postby Homrou » Wed Apr 19, 2017 8:18 pm

I have a bunch of worthless credit cards with the following opening dates:
1. Aug 2014
2. Aug 2014
3. Sept 2015
4. Feb 2016
5. Mar 2016
6. May 2016
7. Nov 2016

I want to close them down to simplify my life. Would closing the newest credit cards adversely impact my credit score? If I close cards 3 through 7, would my average credit history age (and credit score) improve since I only have the oldest 2 cards?

Essentially, I am considering closing all (or as many as I can) accounts I don't need and simply getting the chase travel card as suggested in the forum on an earlier post while maintaining a decent credit score since I may purchase a house in 3 years.
Thank you!

Alexa9
Posts: 144
Joined: Tue Aug 30, 2016 9:41 am

Re: Credit score and closing old cards

Postby Alexa9 » Wed Apr 19, 2017 8:29 pm

I would wait until you get your mortgage, then cancel away. Just sock drawer them unless they have annual fees. Maybe close a few of them. Try CreditKarma's simulator.

protagonist
Posts: 4680
Joined: Sun Dec 26, 2010 12:47 pm

Re: Credit score and closing old cards

Postby protagonist » Wed Apr 19, 2017 8:44 pm

If the credit cards don't cost anything to keep, keep them. You can destroy the cards. It will be good for your credit score (a longer credit history and a smaller percentage of "used credit" to "available credit" both enhance your score), and you won't have to ever think about them again. They will not complicate your life if you don't use them.

If they cost money to keep, only keep those that justify their cost.

If you are unable to pay off your credit card debt in full every month (financially or psychologically), then you should cancel any credit cards that give you credit above and beyond the amount that you can pay off in full every month, and not be tempted into getting more credit by a promotion.


The older the credit card, the better it is for your credit score. But the benefit is small. So if you have to decide which free card to keep between an older one and a newer one, and they both are otherwise equal to you, cancel the newer one.

If all 7 cards are worthless to you and you want a Chase card, get the Chase card and cancel all of the others that cost money to keep....keep the free ones but destroy the cards. Be aware that if you opened 5 or more cards in the last 24 months you may be ineligible for the Chase card you want, and based on your post, you would not be eligible until after September 2017 . There are other threads here addressing that issue. It's called the 5/24 rule, and there are sometimes ways around it. You should google it ("Chase 5/24 rule") before committing to action.

Cyclone
Posts: 233
Joined: Sun Jan 10, 2010 9:48 pm

Re: Credit score and closing old cards

Postby Cyclone » Wed Apr 19, 2017 9:18 pm

Be aware that if you don't use a credit card for awhile, they might cancel it. They may not even tell you it was canceled.

GuyInFL
Posts: 20
Joined: Thu Aug 04, 2016 7:17 pm

Re: Credit score and closing old cards

Postby GuyInFL » Wed Apr 19, 2017 9:24 pm

Clark Howard recommends using the cards every six months.

"The better plan is to keep your cards open, make a small charge every six months and pay it off in full. By doing that, you’ll boost your credit score over time."

A_C_E
Posts: 104
Joined: Fri Feb 22, 2013 11:22 pm

Re: Credit score and closing old cards

Postby A_C_E » Wed Apr 19, 2017 9:50 pm

I thought credit score captures the average age of open accounts. Why wouldn't one want to close the newer accounts in order to bump the age of credit history? Or do I not understand how the average age is calculated?

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grabiner
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Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Credit score and closing old cards

Postby grabiner » Wed Apr 19, 2017 9:59 pm

A_C_E wrote:I thought credit score captures the average age of open accounts. Why wouldn't one want to close the newer accounts in order to bump the age of credit history? Or do I not understand how the average age is calculated?


Most scoring models count the age of all accounts, not just open accounts: reference discussion from FICO forum Closing the card will cause it to drop off your report after 10 years, and that may affect your score.

Closing any card, new or old, will affect your number of open accounts (may not matter if you still have several cards), and your utilization ratio (which does matter, but not if it is very low; going from 4% to 8% utilization won't change your score significantly).
David Grabiner

rec7
Posts: 2013
Joined: Tue Oct 28, 2008 7:22 pm
Location: ST LOUIS

Re: Credit score and closing old cards

Postby rec7 » Wed Apr 19, 2017 10:08 pm

If it were me I would wait until you get the house. Then close all the cards you want just keep two lines of credit open. I just closed a credit card, opened a line of credit and had a hard pull. My score only dropped 8 points.
Disclaimer: You might lose money doing anything I say. Although that was not my intent. | Favorite song: Sometimes He Whispers Jay Parrack

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CardinalRule
Posts: 25
Joined: Sun Jan 15, 2017 11:01 am
Location: Pacific Northwest

Re: Credit score and closing old cards

Postby CardinalRule » Thu Apr 20, 2017 1:02 am

Interesting VantageScore tweaks coming.

http://www.cnbc.com/2017/04/19/major-ch ... lated.html

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grabiner
Advisory Board
Posts: 20073
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Credit score and closing old cards

Postby grabiner » Thu Apr 20, 2017 9:47 am

CardinalRule wrote:Interesting VantageScore tweaks coming.

http://www.cnbc.com/2017/04/19/major-ch ... lated.html


This should be in a separate thread, so I started one with VantageScore's official press release: New version of VantageScore coming. Thanks for the heads-up.
David Grabiner


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