I want to cancel my oldest card -- advice?

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cadaf
 
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I want to cancel my oldest card -- advice?

Postby cadaf » Wed Jan 20, 2016 3:06 pm

Hello,

Recently I decided I wanted to replace my high annual fee AmEx. I applied for one of their card with no annual fee and good rewards, was accepted, and now want to cancel my AF card before the AF kicks in in June. However, the high AF card is one of my older cards and I am aware of the negative effects of closing an older card. However, I do not want to take a hit on the annual fee and none of my cards have any balances, so I think I am good as far as credit utilization goes, since I am replacing one line of credit with another.

Any advice?

Thanks.


swipe_masta
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Re: I want to cancel my oldest card -- advice?

Postby swipe_masta » Wed Jan 20, 2016 5:22 pm

It's true your score may drop a few points because your available overall credit limit will decrease and the AoA (age of accounts) will decrease as well, but if you have no plans of pulling your scores in the near future, I don't think it will harm you. People often forget that cards in good standing closed by the holder will stay on the cardholder's record for 10 years before it drops off. By the time it does drop off, you'll have 10 years worth of credit history established.

CardAttack
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Re: I want to cancel my oldest card -- advice?

Postby CardAttack » Wed Jan 20, 2016 6:57 pm

I used to have a Delta Platinum and no longer wanted to pay the AF. I got on a chat session with Amex and they did a PC to a no fee Hilton Hhonors for me. Not my first choice in cards, but it allowed me to keep the credit line I've had for 30 years.
Amex BCP|Amex Hilton HHonors|AARP Visa|Chase Freedom |BofA BBR|BofA Cash Rewards | BofA Travel Rewards |Citi DC|Discover IT|US Bank Cash +|REI Visa

kdm31091
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Re: I want to cancel my oldest card -- advice?

Postby kdm31091 » Thu Jan 21, 2016 7:02 am

I think people worry too much about this particular subject. As stated, you have 10 years before the closed account falls off. 10 years is a long time, and who knows what will happen by then?

Furthermore, AAOA is only 15% of your score. It's more important to make your payments on time and keep the utilization low. You said your utilization is already low, so you're good on that front. Worrying about a potential 15% score impact a decade from now is unnecessary. You shouldn't feel obligated to keep the card just because it happens to be your oldest.

takeshi
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Re: I want to cancel my oldest card -- advice?

Postby takeshi » Fri Jan 22, 2016 9:38 am

cadaf wrote:However, the high AF card is one of my older cards and I am aware of the negative effects of closing an older card.

Are you?

Closed accounts typically continue to show up on your reports for 10 years after closure and continue to factor into AAoA. At that point in time, the card will drop off and your AAoA will be impacted but if you keep any accounts from now they'll be 10 years older which will bolster your AAoA. Opening the new card lowered your AAoA. Length of Credit History is typically 15%.
http://www.myfico.com/crediteducation/w ... score.aspx

Despite the popularity of the meme, you don't have to hoard credit for good credit. I don't keep anything open that is of no use to me and my FICO 8's are all in the low 800's.

cadaf wrote:so I think I am good as far as credit utilization goes, since I am replacing one line of credit with another.

You can do the math to determine impact to revolving utilization which is immediately impacted by closing an account.

cadaf wrote:Recently I decided I wanted to replace my high annual fee AmEx. I applied for one of their card with no annual fee and good rewards

Make sure you considering total cost/benefit and not just AF/no AF. Make sure you're running the numbers for your spend.

JackLane
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Re: I want to cancel my oldest card -- advice?

Postby JackLane » Sat Jan 23, 2016 7:15 am

cadaf wrote:Hello,

Recently I decided I wanted to replace my high annual fee AmEx. I applied for one of their card with no annual fee and good rewards, was accepted, and now want to cancel my AF card before the AF kicks in in June. However, the high AF card is one of my older cards and I am aware of the negative effects of closing an older card. However, I do not want to take a hit on the annual fee and none of my cards have any balances, so I think I am good as far as credit utilization goes, since I am replacing one line of credit with another.

Any advice?

Thanks.

I don't know how old this card is, and how much credit you have. I had my first card that was secured with small credit and short credit history. I was holding on to that card as everyone told me the same thing, AAoA will reduce and credit score will take a hit. Although AAoA reduced, credit score took a hit by only 10 points, which gained 25 points next month. Although YMMV, this is my story.
Chase Freedom 04/2012. $6500 | Costco Citi 10/2012 $8100 | AmEx BlueCash 06/2015, $15000 |Discover It 07/2015, $5200 |Amazon Store Prime 01/2016 $2200
Local Credit Union secured card, 12/2009 - Closed 02/2015
Tu-764, Ex-764

kdm31091
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Re: I want to cancel my oldest card -- advice?

Postby kdm31091 » Sat Jan 23, 2016 7:32 am

JackLane wrote:
cadaf wrote:Hello,

Recently I decided I wanted to replace my high annual fee AmEx. I applied for one of their card with no annual fee and good rewards, was accepted, and now want to cancel my AF card before the AF kicks in in June. However, the high AF card is one of my older cards and I am aware of the negative effects of closing an older card. However, I do not want to take a hit on the annual fee and none of my cards have any balances, so I think I am good as far as credit utilization goes, since I am replacing one line of credit with another.

Any advice?

Thanks.

I don't know how old this card is, and how much credit you have. I had my first card that was secured with small credit and short credit history. I was holding on to that card as everyone told me the same thing, AAoA will reduce and credit score will take a hit. Although AAoA reduced, credit score took a hit by only 10 points, which gained 25 points next month. Although YMMV, this is my story.


AAOA won't be reduced until a decade later when the account falls off. Initially upon closure, AAOA isn't impacted at all.

The only thing that changes instantly when a closed account reports is utilization, which is a fluid thing with no memory anyway. If closing the account makes your utilization go up, you may see a few to several points come off your score, which will rebound when paid down. Perhaps that is what happened to you, but AAOA wouldn't have changed.

Either way the "keep your oldest card open forever' meme is definitely overstated. Over on "the other site", people are terrified of closing cards most of the time for no good (IMO) reason.

JackLane
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Re: I want to cancel my oldest card -- advice?

Postby JackLane » Sat Jan 23, 2016 8:50 am

Thanks for clarification.
Chase Freedom 04/2012. $6500 | Costco Citi 10/2012 $8100 | AmEx BlueCash 06/2015, $15000 |Discover It 07/2015, $5200 |Amazon Store Prime 01/2016 $2200
Local Credit Union secured card, 12/2009 - Closed 02/2015
Tu-764, Ex-764

thom02099
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Re: I want to cancel my oldest card -- advice?

Postby thom02099 » Sat Jan 23, 2016 10:34 am

Prior to closing your older of the two cards, AMEX will allow you to move the credit limit on that card to the newer card, and then you can close the card you wish to close.

I did this with my AMEX Clear, transferred the CL to the AMEX BCP, then closed the Clear. For some strange reason, they required that I leave $100 in the Clear account, but I was able to transfer everything else with no problem, and then they closed the Clear. No pulls at all, just a phone call and it was done.

Utilisation was not impacted as far as scores were concerned, since it remained basically unchanged, less $100.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

Kevin86475391
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Re: I want to cancel my oldest card -- advice?

Postby Kevin86475391 » Sun Jan 24, 2016 11:36 pm

All certainly true about the 10 more years before account age is affected anyway, but if you are worried about it...

CardAttack wrote:I used to have a Delta Platinum and no longer wanted to pay the AF. I got on a chat session with Amex and they did a PC to a no fee Hilton Hhonors for me. Not my first choice in cards, but it allowed me to keep the credit line I've had for 30 years.


This seems like excellent advice to me and exactly what I was going to recommend. If your current AF card is of no use to you then it can't hurt to try to do a PC (product change) into a no AF account. The worst they can do is say no, but as CardAttack's story indicates it's absolutely possible they'll say yes and then you won't lose the account history anyway.

If they won't do the PC and you're sure you don't want the card then I'd absolutely close it. As others have said, it won't impact you at all for 10 more years and probably won't hurt that much at that point, if at all. I'd try to do the PC first and if they won't, close it anyway.



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