Closing Cards After Opening

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6 posts
Raevyn
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Closing Cards After Opening

Postby Raevyn » Sun Feb 05, 2017 6:45 pm

Hello,

So I have an odd situation.

I got a pre-qual offer from a bank for a card, and so I took it since I am currently working to get rid of old cards I got when my credit was damaged. Plus they gave a sign up bonus. I have had it about 3 months. Shortly after that, I saw they upgraded another type of card I have been wanting, so I applied and got that one too.

Now the bank is willing to combine my credit limits of both into one card, but it would cancel the other one out as closed by my request.

I know that your length of history weighs about 10% or so on the factoring, and I know the drop in my score now is due to recently opened accounts and will go up steadily, but what I am wondering is whether cancelling that one card after combining the limits would be a good idea or not.

Just in case it matters, neither card charges an annual fee to have, I just wont end up really using the one because its rewards are not as good as the other I got after.


rockyrock
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Re: Closing Cards After Opening

Postby rockyrock » Mon Feb 06, 2017 9:30 am

It really depends how you like to play it. I have no problem keeping cards open that I'm not using. In fact, 1/2 of my cards don't get used on a regular basis. My USAA Amex has never been used and the card has been replaced twice from expiration! I keep it open for to boost my ratio and AAOA. Of course it has no AF so I'm okay with this.

Others don't believe in keeping accounts open that aren't being used. That is strictly a personal preference as there is no reason advantageous to your score to close any account--ever. Well I suppose if you have too much available credit and are trying to open a new account it could (possibly) impair your ability to get approved. This has only been an issue for me when it is the same issuer, in that case I was able to resolve by shifting.

In your case, I would keep the minimum credit-line on that card and just sock drawer it. You will be able to monitor it online every time you manage the one you are using. Depending on the issuer, you may have to make a purchase every now and again to keep it open. Use it twice a year to load $5 on your Starbucks card or a small Amazon purchase.

Good luck and remember YMMV.
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Raevyn
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Re: Closing Cards After Opening

Postby Raevyn » Mon Feb 06, 2017 11:12 am

Hm okay. I have no balance on that card now, so would dropping the limit down to the minimum, and moving the extra to the card I want hurt my credit at all?

kdm31091
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Re: Closing Cards After Opening

Postby kdm31091 » Tue Feb 07, 2017 6:59 pm

Closing cards is largely a preference. Most of the damage from opening an account occurs immediately (hard pull, AAOA ding) and the damage from closing, other than utilization, takes a long time to actually happen (in 10 years, the account falls off and potentially hurts your AAOA somewhat). Because of the way the system works, this means there's really no major disadvantage to closing accounts most of the time, unless we're talking about one of only two accounts or some such situation. But in situations where you have several accounts and low utilization, closing is unlikely to make much difference either way.

Others prefer to just leave them open and put an occasional charge on them. Nothing wrong with that approach either. I just prefer managing less cards, so if a card is definitely not going to be useful anytime soon, I typically just close it.

rockyrock
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Re: Closing Cards After Opening

Postby rockyrock » Wed Feb 08, 2017 8:32 am

Raevyn wrote:Hm okay. I have no balance on that card now, so would dropping the limit down to the minimum, and moving the extra to the card I want hurt my credit at all?


Like kdm mentioned, the damage is already done. What you propose will not hurt your credit.
Sapphire Reserve: travel & dining
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Freedom: 5% cats
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droid
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Re: Closing Cards After Opening

Postby droid » Wed Feb 08, 2017 12:44 pm

If it's a new card and you don't want to have it, why not close it. Your AAoA will go up. I only keep cards I'm likely to use in the next year unless they are old then I charge an item I was going to buy anyway and pay it off immediately.



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