Cancelling oldest credit card?

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xoxoyazyxoxo
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Cancelling oldest credit card?

Postby xoxoyazyxoxo » Mon Apr 13, 2015 7:00 pm

My oldest credit card is a little over 2 years old now. I just got a credit card with my bank. I was rejected when I first applied 2 years ago. How much would it affect my credit score if I closed my oldest?

I just got my free credit score with my bank and it's pretty good. Being a college student with loans, and graduating next year, I don't want closing my oldest account to hurt anything when I go to buy a car or get an apartment or something.

Can my bank provide a scenario of what would happen if I closed my oldest? I would check with creditkarma but I'm very skeptical of the website.


takeshi
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Postby takeshi » Tue Apr 14, 2015 7:46 am

Immediate impact is to utilization. You can do the math to determine the impact to your utilization. AAoA is not immediately impacted and is only affected when the account falls off your reports which is usually 10 years after closure (though some have seen accounts fall off earlier). We can't tell you the impact to your score. Scores are never just about the change but about one's credit and how the change factors in.

xoxoyazyxoxo wrote:I just got my free credit score with my bank and it's pretty good.

Keep in mind that you don't have just one credit score. There are 3 CRA's used as data sources and for any scoring model you have a score with each of them. On top of that, creditors use a number of different scoring models so you can't just assume that the score your bank provides is what other creditors will pull for you. If you're going to rely on scores make sure you understand which CRA and scoring model were used for each score as well as which CRA and scoring model a creditor that you're applying to will use.

I recommend focusing on the data in your reports instead of fixating on specific numbers. Good reports will lead to good scores.

xoxoyazyxoxo wrote:Can my bank provide a scenario of what would happen if I closed my oldest?

Your bank does not generate credit scores. They could possibly tell you how they'd assess your credit but they probably won't disclose such information and that wouldn't necessarily apply with any other creditor. Do not rely on CK for anything other than monitoring your TU and EQ credit reports. Note that CK provides VantageScores. Again, keep in mind what CRA's and models your creditors use. Do any of them actually use VantageScores?

Do not assume you can use a score generated by one model to determine a score generated by a different model -- even if both models are FICO's. You should expect the different algorithms to produce different results. That's why I don't recommend fixating on the numbers.


General advice is at least 2-3 cards for scoring purposes. Would you be above that threshold if you closed the card?

JamesMS
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Postby JamesMS » Tue Apr 14, 2015 8:22 am

Being that you have a short credit history, I would not close your other credit card account. By doing that, your average credit history term will be reduced. Part of your credit score is based on this factor. On top of this, you should always have a variety of credit (this also means having at least a couple credit cards active).
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rockyrock
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Postby rockyrock » Tue Apr 14, 2015 8:45 am

I agree with the advice so far.

Normally I would say if you don't plan to use it, just close it. But it sounds like you only have two and I strongly agree with takeshi in having 2-3 cards for scoring purposes AND utilization purposes.

Is there an AF on the card you want to close? If not I would just sock drawer it and use it once or twice a year to keep active. If there is, I would consider opening another card with no AF from different issuer if possible. Another possibility is maybe you can call the issuer and see if there is a different card with no AF you can change to.
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xoxoyazyxoxo
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Postby xoxoyazyxoxo » Tue Apr 14, 2015 2:08 pm

rockyrock wrote:Is there an AF on the card you want to close?


er AF? sorry I don't know what that is... :confused:

xoxoyazyxoxo
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Postby xoxoyazyxoxo » Tue Apr 14, 2015 2:11 pm

No... the one I made with my bank is my 2nd card. Hmmm I guess I should keep it then... but it's such a hassle because it's always been weird about payments. If I pay like right away... there's a weird hold usually the next month saying I don't have enough available credit. So I always had to pay like 5-8 days before the due date. That's the only way I can use it without any problems.

JamesMS
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Postby JamesMS » Tue Apr 14, 2015 2:55 pm

xoxoyazyxoxo wrote:er AF? sorry I don't know what that is... :confused:


AF is Annual Fee.
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JamesMS
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Postby JamesMS » Tue Apr 14, 2015 2:57 pm

xoxoyazyxoxo wrote:No... the one I made with my bank is my 2nd card. Hmmm I guess I should keep it then... but it's such a hassle because it's always been weird about payments. If I pay like right away... there's a weird hold usually the next month saying I don't have enough available credit. So I always had to pay like 5-8 days before the due date. That's the only way I can use it without any problems.


If you don't mind me asking, what card do you have that is doing that? I have never heard of a credit card that puts a hold on your limit for paying before the due date. Also, if you can, pay off that card and put it in a drawer somewhere. This way you are not having to worry about that card, but it will also still show active.
Main Cards:
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Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)

xoxoyazyxoxo
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Postby xoxoyazyxoxo » Wed Apr 15, 2015 10:03 am

JamesMS wrote:AF is Annual Fee.


OH DUH. Yes. The annual fee was added with the rest of the statement.

JamesMS wrote:If you don't mind me asking, what card do you have that is doing that? I have never heard of a credit card that puts a hold on your limit for paying before the due date. Also, if you can, pay off that card and put it in a drawer somewhere. This way you are not having to worry about that card, but it will also still show active.


First Progress. It happened twice so I started paying closer to the due date and never had any problems. So right now I'm holding off the payment until after next week. Hm it bugs me though that I'm going to have to keep it though. When would it be okay to cancel the card? Never? 3,5,10 years from now? Paying an annual fee for something I don't use sounds like a pain.

JamesMS
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Postby JamesMS » Thu Apr 16, 2015 9:37 pm

I've heard of them but never had any dealings with them. That sounds kind of shady to me. I mean, you would think that they want their card holders to pay but who knows.

Cancelling a card is a personal choice, I've done it a few times in the past, mostly because they were cards that made no sense anymore (I had to rebuild my credit after I decided to leave one company to star another). Your credit report is very fickle, a lot of information foes into determining everything. Most lenders want to see multiple lines of credit when you are applying for new ones. They also don't want to see tons of new accounts opening in a short period. If it were me, I would slowly start getting a couple of other cards, spread out of coarse. Then once you are comfortable closing it, close it. If you are good with doing that now, it is ultimately your decision, but I would keep it for a little while longer. It will help your credit in the meantime.

If you have any other questions, please feel free to ask.
Main Cards:
Amex BCE
Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)



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