Cancelling 24 Year Old Credit Card

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Leesbro63
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Cancelling 24 Year Old Credit Card

Post by Leesbro63 » Thu Jun 27, 2019 3:58 pm

In the interest of simplifying my life, I'm thinking of cancelling a few seldom used credit cards. One, in particular, is a Cap1 card that has 1.5% rewards. The only reason I've kept it until now (I have a Citi 2% card and soon a BOA 2.625% card) is because it's 24 years old. My credit scores are all between 820 and 825, depending on the source. When I simulate cancelling this card, it drops my credit 2 points. It seems like a no-brainer to let this old card go, but I'm just wondering if I'm missing anything. The next newest card is only 4 years old, although my overall credit is, as noted, excellent and has always been so (I am 59 years old).

mptfan
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Re: Cancelling 24 Year Old Credit Card

Post by mptfan » Thu Jun 27, 2019 4:01 pm

Cancel them and don't look back. You're not missing anything except simplicity.

mrc
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Re: Cancelling 24 Year Old Credit Card

Post by mrc » Thu Jun 27, 2019 4:02 pm

I put my old cards in the safe, and charge something online once a year. With a couple other cards that spouse and I have, I put recurring charges like the newspaper on them. Everything else goes on the high rewards cards. I'm not sure how much of a hit closing and older card, or lowering your credit use ratio by closing that card would be. But it's easy to keep them around. If you really don't want it, close it. Your credit rating should recover soon. Of course, don't do this just before you're going for a new loan.
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rocket354
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Re: Cancelling 24 Year Old Credit Card

Post by rocket354 » Thu Jun 27, 2019 4:04 pm

How does it simplify your life? If you don't use it then it's not impacting your life at all. I have a cap1 1.5% card I never use. I get one email a month letting me know that my balance for the month is $0 (so I know nothing has been hacked) and that's it. It also has 0% foreign transaction fee so it's a good fallback travelling card if my current Uber card changes its policies.

Average age of credit goes into credit score. I don't know what your simulator is based on but there are a lot of scores out there with different weights and criteria. You'd lose your by-far oldest account, lose some credit limit, and thus push up your utilization.

So is the gain (2 more seconds per month to not have to read the email) worth the potential impact to your credit score and flexibility in case it does come back to being useful? If so, go for it.

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GerryL
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Re: Cancelling 24 Year Old Credit Card

Post by GerryL » Thu Jun 27, 2019 4:06 pm

If there is no annual fee, another option is to lock it away and stop using it. When the replacement comes, don't activate it. Of course, you'll want to keep an eye on the account to make sure there are no unauthorized charges.

Does anyone here know if the impact on one's credit score is the same if the credit card company closes the account for lack of use?

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rocket354
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Re: Cancelling 24 Year Old Credit Card

Post by rocket354 » Thu Jun 27, 2019 4:11 pm

GerryL wrote:
Thu Jun 27, 2019 4:06 pm
Does anyone here know if the impact on one's credit score is the same if the credit card company closes the account for lack of use?
I had a couple cards recently closed on my by the banks. It showed up on my credit (got the string of emails to prove it), and my credit limit visibly decreased, and my credit utilization of course immediately increased. Also my average age of credit decreased a bit. So I feel confident saying it did affect my score. However, it was not a whole lot; they were all cards from the last 5 years or so that I had never used since getting the sign-on bonus.

euroswiss
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Re: Cancelling 24 Year Old Credit Card

Post by euroswiss » Thu Jun 27, 2019 4:13 pm

I'll differ from the other answers: based on your current score, killing that old card will have a minimal impact on your score. Even that will recover quickly. I'd go ahead and cancel it. Yes, you could stick it in your safe, but it IS something you will always have to think about and keep track because the info could get stolen. One less card, one less account to worry about if something happens to you and your family members have to sort through your finances. Simpler is better

MotoTrojan
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Re: Cancelling 24 Year Old Credit Card

Post by MotoTrojan » Thu Jun 27, 2019 4:14 pm

Not sure if Cap1 has it but many companies also allow you to "lock" your card, making it even safer to just throw in a drawer (I have had some that were only ever used once get fraudulent charges many months later due to a breached system).

delamer
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Re: Cancelling 24 Year Old Credit Card

Post by delamer » Thu Jun 27, 2019 4:16 pm

If you are planning any significant purchases that are credit score dependent — like a mortgage — then I’d hold off canceling.

Otherwise, I’d cancel.

Broken Man 1999
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Re: Cancelling 24 Year Old Credit Card

Post by Broken Man 1999 » Thu Jun 27, 2019 4:22 pm

Leesbro63 wrote:
Thu Jun 27, 2019 3:58 pm
In the interest of simplifying my life, I'm thinking of cancelling a few seldom used credit cards. One, in particular, is a Cap1 card that has 1.5% rewards. The only reason I've kept it until now (I have a Citi 2% card and soon a BOA 2.625% card) is because it's 24 years old. My credit scores are all between 820 and 825, depending on the source. When I simulate cancelling this card, it drops my credit 2 points. It seems like a no-brainer to let this old card go, but I'm just wondering if I'm missing anything. The next newest card is only 4 years old, although my overall credit is, as noted, excellent and has always been so (I am 59 years old).
In the last year I have dropped three cards, Best Buy, Kohl's, and Chase Slate. I experienced a very small decline also. Still in the high 820's. Though, none of those cards had a particularly long credit history. I have a couple more cards to prune, only one of them (Home Depot) has a long history.

Is there a Cap1 card that could be better than your current card, and also preserve your long credit history?

If not, if the simulator says only a couple of points drop, it wouldn't be that painful.

Broken Man 1999
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Leesbro63
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Re: Cancelling 24 Year Old Credit Card

Post by Leesbro63 » Thu Jun 27, 2019 4:24 pm

OK. I am the OP and here's a follow up question: If I keep the card, how infrequently can I use it yet prevent it from getting cancelled for being inactive? Once a year? Twice a year? And if I just do a small charge every 6 or 12 months, is the fact that the charge is merely small a factor?

mrc
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Re: Cancelling 24 Year Old Credit Card

Post by mrc » Thu Jun 27, 2019 4:26 pm

Leesbro63 wrote:
Thu Jun 27, 2019 4:24 pm
OK. I am the OP and here's a follow up question: If I keep the card, how infrequently can I use it yet prevent it from getting cancelled for being inactive? Once a year? Twice a year? And if I just do a small charge every 6 or 12 months, is the fact that the charge is merely small a factor?
Activity is activity. I charge a tank of gas one a year, and have done so with my oldest card for about 5 years now.
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tfb
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Re: Cancelling 24 Year Old Credit Card

Post by tfb » Thu Jun 27, 2019 4:42 pm

Leesbro63 wrote:
Thu Jun 27, 2019 3:58 pm
When I simulate cancelling this card, it drops my credit 2 points. It seems like a no-brainer to let this old card go, but I'm just wondering if I'm missing anything.
You are not missing anything. The account (together with your timely payment history) stays on your credit report with a closed status. It doesn't disappear for many years. By that time you will have new history.
Harry Sit, taking a break from the forums.

shiftleft
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Re: Cancelling 24 Year Old Credit Card

Post by shiftleft » Thu Jun 27, 2019 7:11 pm

Just close it. A few years ago, I closed my oldest card of 20 years, along with paying off the mortgage and it barely made a dent to my credit score. Still sitting 815-830. I only have 2 cards open, of which I only use one regularly.

JBTX
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Re: Cancelling 24 Year Old Credit Card

Post by JBTX » Thu Jun 27, 2019 7:14 pm

There are many different things, like some forms of insurance, that evaluate your credit. They use similar criteria as credit agencies, but they don't use credit score per se. When I was with progressive I fell from the top credit category to the third, out of many categories, and that increased my premium about $150 every six months. The main thing that dinged it was 2 refi inquiries in a couple of months. But my average age of credit cards also dropped a bit. The changes maybe made my credit score drop 10-20 pts but caused a large spike in my insurance premium.

The point is credit score isn't the only criteria.

I have a couple of old cards, one 30 years. I'll usually put some small dollar recurring transaction on them and set up autopay.

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"Simplify. Simplify"

Post by Taylor Larimore » Thu Jun 27, 2019 7:15 pm

Leesbro63
Henry David Thoreau: Our lives are frittered away with detail. Simplify. Simplify.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

TravelGeek
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Re: Cancelling 24 Year Old Credit Card

Post by TravelGeek » Thu Jun 27, 2019 7:28 pm

I "monitor" my credit scores via various credit cards that offer access to an assortment of scores. What I observed is that

- the scores vary between cards because of the different credit bureaus and scoring systems used

- the scores vary from month to month by 5-20 points without me actually doing anything to impact them (other than using credit cards in a consistent way)

- my insurance bills haven't increased noticeably

I will soon close some cards (and ask to have their credit lines moved to other cards in some cases). I don't expect a major impact on my scores beyond what I see anyway, and since I am not looking for new credit (mortgages, car loans), I couldn't care less.

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rocket354
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Re: Cancelling 24 Year Old Credit Card

Post by rocket354 » Thu Jun 27, 2019 7:40 pm

Leesbro63 wrote:
Thu Jun 27, 2019 4:24 pm
OK. I am the OP and here's a follow up question: If I keep the card, how infrequently can I use it yet prevent it from getting cancelled for being inactive? Once a year? Twice a year? And if I just do a small charge every 6 or 12 months, is the fact that the charge is merely small a factor?
I haven't used my capital one card in 3 years. It's still active. I wouldn't worry about it. If you're worried about it getting hacked then just go ahead and cancel it. Otherwise, throw it in a drawer and forget about it.

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Leesbro63
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Re: Cancelling 24 Year Old Credit Card

Post by Leesbro63 » Thu Jun 27, 2019 7:45 pm

rocket354 wrote:
Thu Jun 27, 2019 7:40 pm
Leesbro63 wrote:
Thu Jun 27, 2019 4:24 pm
OK. I am the OP and here's a follow up question: If I keep the card, how infrequently can I use it yet prevent it from getting cancelled for being inactive? Once a year? Twice a year? And if I just do a small charge every 6 or 12 months, is the fact that the charge is merely small a factor?
I haven't used my capital one card in 3 years. It's still active. I wouldn't worry about it. If you're worried about it getting hacked then just go ahead and cancel it. Otherwise, throw it in a drawer and forget about it.
Useful information. If I keep the card, which it seems is fairly pointless (pun intended), I'll just diary it on my calendar once a year to buy a tank of gas or something.

Broken Man 1999
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Re: Cancelling 24 Year Old Credit Card

Post by Broken Man 1999 » Thu Jun 27, 2019 7:55 pm

Perhaps you can freeze the card. I can do that on a few of my cards.

Easy to freeze, easy to unfreeze.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Leesbro63
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Re: Cancelling 24 Year Old Credit Card

Post by Leesbro63 » Thu Jun 27, 2019 8:13 pm

Broken Man 1999 wrote:
Thu Jun 27, 2019 7:55 pm
Perhaps you can freeze the card. I can do that on a few of my cards.

Easy to freeze, easy to unfreeze.

Broken Man 1999
Yes, I can and do.

kilkoyne
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Re: Cancelling 24 Year Old Credit Card

Post by kilkoyne » Thu Jun 27, 2019 8:48 pm

I'm down to one card which was opened less than a year ago. Chase is giving me a score of 824 (down from 825 when I closed my last opened card 6 months ago).

If I open any other cards in the future it will be because there is a really good incentive tied to it.

UpperNwGuy
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Re: Cancelling 24 Year Old Credit Card

Post by UpperNwGuy » Thu Jun 27, 2019 8:52 pm

About two years ago I cancelled a card that had been open since 1974. My credit score didn't change.

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Re: Cancelling 24 Year Old Credit Card

Post by drawpoker » Thu Jun 27, 2019 10:44 pm

If you are indeed 59 years old as you posted - Um, you really should hang on to all of your oldest credit cards, do not think of canceling any. Use each one at least every six, or eight, months for some petty purchase to keep it active. Many of the big ones, BOA, Citi, Chase, etc. are dropping (cancelling) long-time customers without any notice if they don't use the cards after a certain period of time.

There is really no need to fear thieves getting hold of your credit card(s) and ringing up big charges. Almost all of the major credit cards offer 100% protection (zero liability) for unauthorized charges. So please don't let that be a factor in deciding to keep or toss credit cards you don't use.

btw, who told you that your FICO score would drop by only two points if you cancel the card ?? Huh? Unless your card has a ridiculous low limit of around $1,000 or less, that piece of advice just does not make sense at all :shock:

Look into it a bit more before you make any decisions.

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Re: Cancelling 24 Year Old Credit Card

Post by lakpr » Fri Jun 28, 2019 9:37 am

UpperNwGuy wrote:
Thu Jun 27, 2019 8:52 pm
About two years ago I cancelled a card that had been open since 1974. My credit score didn't change.
Wait 10 years and you may wonder why all of a sudden your score dipped 20/30 points ;)

Closed cards with good credit history remain on the credit report, per law, until 10 years after closure. Until then, open or closed, all accounts on the report count in Average Age of Accounts (AAoA), which carries up to 25% of the credit score.

To be sure, what is likely to happen in 10 years is that your other accounts would age an additional 10 years in the mean time, but unlikely to make up for the loss of a 50 year old account. Even then the dip in scores might only case you to drop from a 820+ score to a 800+ score, not really make a difference in practical terms for any credit related activities such as qualifying for best rates on credit cards, insurance, mortgage, etc. My best educated guess.

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Re: Cancelling 24 Year Old Credit Card

Post by Blue456 » Fri Jun 28, 2019 9:46 am

Leesbro63 wrote:
Thu Jun 27, 2019 3:58 pm
In the interest of simplifying my life, I'm thinking of cancelling a few seldom used credit cards. One, in particular, is a Cap1 card that has 1.5% rewards. The only reason I've kept it until now (I have a Citi 2% card and soon a BOA 2.625% card) is because it's 24 years old. My credit scores are all between 820 and 825, depending on the source. When I simulate cancelling this card, it drops my credit 2 points. It seems like a no-brainer to let this old card go, but I'm just wondering if I'm missing anything. The next newest card is only 4 years old, although my overall credit is, as noted, excellent and has always been so (I am 59 years old).
Your card will continue to give you credit history until you are almost 70. I would close the account and call it a day.

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Re: Cancelling 24 Year Old Credit Card

Post by dodecahedron » Fri Jun 28, 2019 9:50 am

GerryL wrote:
Thu Jun 27, 2019 4:06 pm
If there is no annual fee, another option is to lock it away and stop using it. When the replacement comes, don't activate it. Of course, you'll want to keep an eye on the account to make sure there are no unauthorized charges.

Does anyone here know if the impact on one's credit score is the same if the credit card company closes the account for lack of use?
Capitol 1 cancelled my 43 year old credit card for lack of use last year. No noticeable impact on my credit score since then, although my ¨age of oldest account¨ has now declined to 32 years.

iamblessed
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Re: Cancelling 24 Year Old Credit Card

Post by iamblessed » Fri Jun 28, 2019 9:51 am

I closed by oldest card and many others simplifying my life my score dropped 25 points but to me it was worth it. The score will be back up in 6 months to a year.

chevca
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Re: Cancelling 24 Year Old Credit Card

Post by chevca » Fri Jun 28, 2019 10:03 am

You planning to borrow money any time soon, or do anything where your credit score actually matters? If not, who cares. Close it if you'd like, leave it open if you'd like, and if you don't use it and they close it anyway... again who cares.

As mentioned, it's likely to change your credit score much or any.

I think you have given this too much thought already. :happy Close it, or stick it in the sock drawer or wherever. Going back and forth over this isn't simplifying.

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Re: Cancelling 24 Year Old Credit Card

Post by mptfan » Fri Jun 28, 2019 10:19 am

drawpoker wrote:
Thu Jun 27, 2019 10:44 pm
There is really no need to fear thieves getting hold of your credit card(s) and ringing up big charges. Almost all of the major credit cards offer 100% protection (zero liability) for unauthorized charges.
That is only true if you report the unauthorized charges within 60 days of the date the statement was issued, otherwise, you are responsible. I can imagine it is much more likely to miss statements or forget to check accounts that are dormant and are not on your mind and then by the time you realize there were unauthorized charges you become responsible for the charges because you did not timely notify the credit card issuer. And let's say you are timely notified of unauthorized activity... now you have to field phone calls and emails and take the time to contact the credit card issuer and explain that it was not you and possibly fill out forms.

I am in the simplify camp, I do not want to have to regularly check dormant accounts to see if there has been any activity. And that's not to mention receiving unsolicited emails and promotions and reading changes in account terms. No thanks, life is too short for that, and I refuse to worry about my credit score fluctuating a few points because of the length of my account history.

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Re: Cancelling 24 Year Old Credit Card

Post by UpperNwGuy » Fri Jun 28, 2019 1:22 pm

lakpr wrote:
Fri Jun 28, 2019 9:37 am
UpperNwGuy wrote:
Thu Jun 27, 2019 8:52 pm
About two years ago I cancelled a card that had been open since 1974. My credit score didn't change.
Wait 10 years and you may wonder why all of a sudden your score dipped 20/30 points ;)

Closed cards with good credit history remain on the credit report, per law, until 10 years after closure. Until then, open or closed, all accounts on the report count in Average Age of Accounts (AAoA), which carries up to 25% of the credit score.

To be sure, what is likely to happen in 10 years is that your other accounts would age an additional 10 years in the mean time, but unlikely to make up for the loss of a 50 year old account. Even then the dip in scores might only case you to drop from a 820+ score to a 800+ score, not really make a difference in practical terms for any credit related activities such as qualifying for best rates on credit cards, insurance, mortgage, etc. My best educated guess.
I have so many other cards it won’t make a difference. By the way, age of accounts affects 15% of credit score, not 25%.

UpperNwGuy
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Re: Cancelling 24 Year Old Credit Card

Post by UpperNwGuy » Fri Jun 28, 2019 1:41 pm

drawpoker wrote:
Thu Jun 27, 2019 10:44 pm
If you are indeed 59 years old as you posted - Um, you really should hang on to all of your oldest credit cards, do not think of canceling any.
This advice is much too general to apply as a one-size-fits-all solution. It sounds like the advice given on the myFICO Forum, a discussion board for credit card hobbyists. Each person's credit situation is different. In my case, when I closed 8 of 14 cards two years ago, this would have been bad advice.

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