WildBill wrote:I'm not an expert, but from what I understand with the new laws, if YOU close the account as long as it is in good standing(I.e. no late payments) and you have paid off entire balance(i.e. 0 payment due) it will not affect your credit score unless you have high balances on other cards. Customer closing CC is not a bad thing except for the fact that you are lowering you available credit limit. Positive credit accounts will remain on your CR for up to 10 years so don't worry about history. But if you have high balances on your other cards then yes, canceling the Amex will hurt.
It's important to remember that everyone issuing credit cards has more than one 'score' they use. FICO scores don't distinguish between closed and opened accounts, but nearly everyone else does. Even lenders who use FICO for application approval or rejection use other factors to determine rates, limits, etc. Some lenders even consider this as part of the approval. One of the big complaints about FICO scores is that it's a very good predictor of past behavior, its prediction ability of future default is less good.
Other scoring systems, which use data from sources not strictly from the credit bureaus, including what they already know about you from your relationship with the lender, what you filled out on the application, and more, do consider open vs. closed, (because, really, what's it matter that 6 years ago you had an account for a year?), and treat other data differently (FICO doesn't care about the difference between a bank issued revolver and a store issued one, except when it does. Other people do.).
Closing a credit account will effect those scores. Maybe positively, maybe negatively.
It's impossible to know, unless you know what the lender likes. If you have a bunch of closed accounts that were open for short periods, it may look like you're a signup bonus chaser, and not a good long term customer. So might lots of open accounts that don't have any usage. (And remember, what a lender sees is only the reported balance, and the reported minimum payment. They can't tell you spend $10,000 dollars on your card every month, if the balance reports 0 or if it always reports $10K. Actual payment history is not part of the reporting format used by most institutions.)
Some lenders might like that behavior for some products, because they think you'll pay fees or interest. Closing tradelines you don't use means you reduce your total available credit, which makes you look less risky (if you can charge your annual income overnight, they're less willing to extend you more....).