How much does cancelling a credit card hurt your credit score?

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DONx3
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How much does cancelling a credit card hurt your credit score?

Postby DONx3 » Sat Jul 13, 2013 8:46 pm

I have two credit cards (from Fifth Third Bank and Macys) I don't use and don't see the point of having them. If I do cancel them, how many points will I lose on my credit score and will those points recover over time and go back to what I originally had?



All My Cards:
Amex Blue: 12k and 12 years owned.
BOA Rewards Platinum Plus: 9.5k and 6 years owned.
Chase Sapphire Preferred: 6k and only got this a couple days ago.
5/3 Bank Visa Signature Rewards: This credit card does not disclose my credit limit and I believe the high limit is what is used on my total credit limit which is $900. I actually have 3k but it does not show that credit limit. I have had this card for 3.5 years too.
Macys credit card: $100 limit and 6 years owned

Can I ask one of the 3 credit cards for a limit increase and tell them I will close the Fift Third bank credit card in exchange for a limit increase?
Amex Blue Cash Everyday 07/01
Amex Starwood Preferred Guest 03/16, BD 01
BOA Cash Rewards Visa Sig 06/07
Chase Freedom Visa Sig 12/13
Chase Ink Plus Visa Sig 05/16
Chase Sapphire Preferred Visa Sig 07/13
Discover It 01/14
IHG Rewards Club World MC 12/14
Southwest Rapid Rewards Plus Visa Sig 08/16


mattymatt808
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Postby mattymatt808 » Sun Jul 14, 2013 5:03 am

First of all, a closed account will stay on your report for 10 years anyway. Two factors of your credit score are your Average Age of Accounts (AAoA) and your utilization rate, which is the ratio of your total outstanding balances to your total credit limit. Since these are your smallest limits, closing them will not have a huge effect on your utilization rate. Currently as your youngest accounts they are bringing your AAoA down, but if you ever plan to add new credit or loan accounts, these two will eventually add more weight to the older side of your report and keep your AAoA from dropping as much. Honestly, if they have no annual fee, there's no reason to close them.
$2500 First Hawaiian Bank (6/10)
$4500 CHASE Freedom (2/13)
$3500 Citi Forward (2/13)
$2000 Discover it (2/13)
$9600 AMEX BCE (3/13)
$10000 CHASE Sapphire Preferred (7/13)
$5000 CHASE Ink Plus (8/13)

DONx3
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Postby DONx3 » Sun Jul 14, 2013 6:08 am

I did a AAOA online calculator and with the 5 accounts the average was 6 years but if I cancel the 2 other accounts and keep the 3 accounts that I want it will be 9 years average. Or is that not how it works? Are closed accounts still included in the AAOA? These 2 cards are my smallest limits so I know I am good there.
Amex Blue Cash Everyday 07/01
Amex Starwood Preferred Guest 03/16, BD 01
BOA Cash Rewards Visa Sig 06/07
Chase Freedom Visa Sig 12/13
Chase Ink Plus Visa Sig 05/16
Chase Sapphire Preferred Visa Sig 07/13
Discover It 01/14
IHG Rewards Club World MC 12/14
Southwest Rapid Rewards Plus Visa Sig 08/16

MemberSince99
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Postby MemberSince99 » Sun Jul 14, 2013 6:59 am

I think you are way over-thinking it. A 100 limit card has to be some kind of a joke it's barely usable even for a department store card and if you get a 50 dollar item you are at 50% utilization, close that thing. The alternative is to call them and tell them you do NOT want or authorize a hard pull but if you can't get a limit you can actually use to close the account, I'm sure they will be delighted to close it for you.

Same with the 5th 3rd card. You have other cards with LONG history. I would not sweat this. I've personally closed numerous cards in the last year and not a single one caused my credit to tank. Don't over think the living hell out of it, analyzing it like it's some critical to the security of the world situation, just do it.

DONx3
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Postby DONx3 » Sun Jul 14, 2013 7:55 am

Thanks for the responses, I will close those 2.
Amex Blue Cash Everyday 07/01
Amex Starwood Preferred Guest 03/16, BD 01
BOA Cash Rewards Visa Sig 06/07
Chase Freedom Visa Sig 12/13
Chase Ink Plus Visa Sig 05/16
Chase Sapphire Preferred Visa Sig 07/13
Discover It 01/14
IHG Rewards Club World MC 12/14
Southwest Rapid Rewards Plus Visa Sig 08/16

flan
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Postby flan » Sun Jul 14, 2013 9:33 am

mattymatt808 wrote:First of all, a closed account will stay on your report for 10 years anyway. .


It's factored into FICO scores, yes. It's not so much in other scores, and in the calculating limits process: Who cares about a card you closed five years ago? A bank might, were it one of their accounts, anyone else, not so much.

I'd stick the macy's card in the sock drawer, and if they cancel it, they cancel it. (unless you actually shop there; then you'd do well to use it, there are substantial discounts on offer from time to time.) See what 5/3 will do for you, though, before closing the account.

DONx3
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Postby DONx3 » Sat Jul 20, 2013 1:19 pm

I think I am going to keep the 5/3 card after all and possibly switch it to their preferred visa signature which is practically the same card that I have but looks more professional and better. The look of the card I have now is so bland and ugly and one of the reasons why I didn't want to keep it. I realized it's a visa signature card, no annual fee, adds history, better AAoA and it would be a waste to cancel it. I am a minimalist and get rid of anything that I don't need or use (opposite of pack rat so to speak).

I was on credit karma and got a notice that one of the limits of my credit cards have decreased and saw it was the macys card. It had a $100 credit limit and it showed they decreased it to $0. Not sure if they cancelled it or what not.
Amex Blue Cash Everyday 07/01
Amex Starwood Preferred Guest 03/16, BD 01
BOA Cash Rewards Visa Sig 06/07
Chase Freedom Visa Sig 12/13
Chase Ink Plus Visa Sig 05/16
Chase Sapphire Preferred Visa Sig 07/13
Discover It 01/14
IHG Rewards Club World MC 12/14
Southwest Rapid Rewards Plus Visa Sig 08/16

MemberSince99
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Postby MemberSince99 » Sat Jul 20, 2013 4:55 pm

That means it's closed.

I really find it incredible that an issuer would give a limit of 100 dollars (and worse never ever raise it). Good thing you didn't need that.

DONx3
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Joined: Sat Jul 06, 2013 11:04 pm
Location: CO

Postby DONx3 » Sat Jul 20, 2013 6:33 pm

I don't remember what was my credit limit in the beginning but its weird they finally closed it after 6 years.
Amex Blue Cash Everyday 07/01
Amex Starwood Preferred Guest 03/16, BD 01
BOA Cash Rewards Visa Sig 06/07
Chase Freedom Visa Sig 12/13
Chase Ink Plus Visa Sig 05/16
Chase Sapphire Preferred Visa Sig 07/13
Discover It 01/14
IHG Rewards Club World MC 12/14
Southwest Rapid Rewards Plus Visa Sig 08/16



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