Is it better to keep a card that will never be used or close it?

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tschmelcher
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Is it better to keep a card that will never be used or close it?

Postby tschmelcher » Tue Dec 03, 2013 10:36 pm

At my insistence, my wife applied for a US Bank Cash Plus card, but she was issued a Cash Rewards card instead (despite us specifically asking them to not issue any card if she couldn't get Cash Plus!). We're going to call to ask if they can reconsider her for Cash Plus, but if they can't then we're never going to use the Cash Rewards card they issued.

If that happens, would it better for her credit score to immediately close the account or to keep it open indefinitely without ever using it?


daniel2304
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Postby daniel2304 » Wed Dec 04, 2013 1:45 pm

It really depends.

1/ I know you said you just got it, but still worth to mention that even a credit card that has very small line of credit but it's an old one and does not have an annual fee, I would recommend to keep it. Sometimes use it to buy coffee and pay it off immediately. It helps to keep your credit history length.

2/ If it's new, consider its benefits and credit line. If its credit line adds to your current credit limit that can lower your utilization, I don't see why you should close it.
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benhollberg
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Postby benhollberg » Wed Dec 04, 2013 2:00 pm

If there is no annual fee then just keep it open. It'll eventually be closed by the issuer but the longer it stays open the better. If it has an annual fee may be best to close unless it is really cheap ($30 or less).
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takeshi
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Postby takeshi » Wed Dec 04, 2013 2:03 pm

Better's a subjective matter. The hit from the inquiry and to AAoA are already done. It really doesn't matter from a scoring perspective either way. If the card won't be used and potential fraud is a concern then closing it may be a good idea. If you can sock drawer it and monitor it then keeping it open can be a good idea.

You'll take a hit to utilization from losing the available credit on the card if it is closed but AAoA won't be affected until it falls off. Closed accounts in good standing continue to report for 10 years.

It's really your call to make based on your preference.

MemberSince99
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Postby MemberSince99 » Wed Dec 04, 2013 2:56 pm

In this case, I would advise keeping it open ONLY because it is possible they will upgrade you to the Cash + with some time and use. If that wasn't the case and you had no use for the card, I'd say go ahead and close it. But I would guess within 6 months to a year tops you should be able to PC to a Cash + so because of this I would keep it and go for that since you already took the pain of applying for it.

tschmelcher
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Postby tschmelcher » Wed Sep 10, 2014 7:25 am

Note to others: we took the advice here by keeping the card open and occasionally putting purchases on it. Last week we called in to ask for an upgrade to Cash+ and got it with zero hassle!

popamode72
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Postby popamode72 » Wed Sep 10, 2014 7:34 am

I'd keep it, run some occasional charges on it to keep it active and then try upgrading to the Cash + down the line. I think if they still don't let you PC into that card, then you can probably close it if you don't need it.
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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Sep 10, 2014 12:09 pm

tschmelcher wrote:Note to others: we took the advice here by keeping the card open and occasionally putting purchases on it. Last week we called in to ask for an upgrade to Cash+ and got it with zero hassle!


Congrats! I know they have pretty strict credit standards. When I had them do a soft pull a month ago to see if I was prequalified for anything, they suggested I get a debit card with them.

They aren't on my 2015 short list, but are a possible option for the future in general. Knowing that it is possible to get in the door with Cash Rewards and then PC to Cash+ might prove useful if I take that path sometime in the future.
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