Author Topic: Closing oldest credit cards' effect on credit score, if any?  (Read 890 times)

Mr. Green

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My wife and I currently have 6 credits cards between us, one of them being joint, so she has 3 active cards on her record and I have 4. Our 3 oldest cards (one hers, one mine, one joint) all have over 10 years of credit history but they're all worthless for travel hacking, and aren't from a bank (Bank of America and Capital One) that has a good program that would merit switching the card type. All our other cards are pretty young because we use them for travel hacking.

I'm considering closing two of our oldest cards (one mine, one hers), leaving only the joint card with over 10 years of credit history. It's a real pain in the ass to continue remembering to spends tiny amounts of money on these accounts to keep the issuer from closing them, and in general it just makes things more complicated when I'm already tracking other cards for travel hacking.

I'm not worried about the loss of overall credit. We don't come anywhere close to the 30% credit utilization where exceeding that dings your score. I am a little nervous about total credit history though. I've read that closed cards will stay on your record for 10 years before falling off. We plan to keep my wife's Chase Freedom Unlimited card, because that's the best no annual fee travel card right now so by then she'll have another card with 10 years history to replace hers. Of course we'll still have our joint card active that has over 10 years of history I plan to get a Chase Sapphire card eventually and then transfer that to a Freedom Unlimited card after the first year but right now Chase is denying my applications based on the number of recent open accounts.

Will I regret closing two of our oldest accounts that we don't use anymore?

Luck12

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #1 on: July 24, 2018, 08:10:12 AM »
I open and close cards all of the time and score never drops below 760 so I don't think it has a huge effect. 

FIRE@50

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #2 on: July 24, 2018, 08:17:56 AM »
Is there a good reason for you to even care about your credit score? In the near term I mean. Planning on getting a mortgage in the next year or something? Personally, I would just let the cards go unused until the issuer closed them. I have a few cards in that status right now.

Systems101

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #3 on: July 24, 2018, 08:36:00 AM »
The math that matters is this case is average age of account.  It's not a major swinger of overall credit score, but it does have an impact.

The exact impact on your score obviously depends on which credit scoring system and version are being used.

I would do the math on how much your average will change.  I would personally avoid getting the average below 3 years. 

frugaliknowit

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #4 on: July 24, 2018, 08:52:08 AM »
If your credit score is high 700s-800+, I wouldn't worry about it, unless you are planning to take on new credit such as a mortgage soon (not including new travel hacking...).

Mr. Green

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #5 on: July 24, 2018, 08:53:59 AM »
The math that matters is this case is average age of account.  It's not a major swinger of overall credit score, but it does have an impact.

The exact impact on your score obviously depends on which credit scoring system and version are being used.

I would do the math on how much your average will change.  I would personally avoid getting the average below 3 years.
From what I'm reading online, closed accounts still count toward the overall average so it would be years down the road when they fall off our histories, unless you're talking about another metric that is only active cards. In that case, it would drop my average to just over 5 years (assuming once a card goes beyond 10 years it still shows as 10, which I believe is true) and my wife's average to about 6 years.

Mr. Green

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #6 on: July 24, 2018, 08:56:19 AM »
If your credit score is high 700s-800+, I wouldn't worry about it, unless you are planning to take on new credit such as a mortgage soon (not including new travel hacking...).
Our credit scores are stellar. As far as a mortgage goes, our biggest hurdle at this point is being FIRE so we have no job income. We don't intend to buy a house or refinance any time soon.

Mr. Green

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #7 on: July 24, 2018, 09:00:20 AM »
Is there a good reason for you to even care about your credit score? In the near term I mean. Planning on getting a mortgage in the next year or something? Personally, I would just let the cards go unused until the issuer closed them. I have a few cards in that status right now.
I suppose you're right. I should just toss them in a drawer and pretend they don't exist. If it take them a year or two to close them then it's just added time for our history and gives any newer cards we have and want to continue to use a chance to age.

MetalCap

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #8 on: July 24, 2018, 09:29:32 AM »
I used the free Credit Wise what-if simulator from Capital One (used their Venture card for cash back) to show what would happen if i closed x account.  It might give some insight if you want to check it out.

clutchy

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #9 on: July 24, 2018, 09:32:32 AM »
Is there a good reason for you to even care about your credit score? In the near term I mean. Planning on getting a mortgage in the next year or something? Personally, I would just let the cards go unused until the issuer closed them. I have a few cards in that status right now.
I suppose you're right. I should just toss them in a drawer and pretend they don't exist. If it take them a year or two to close them then it's just added time for our history and gives any newer cards we have and want to continue to use a chance to age.

that's what I do.  I don't voluntarily reduce my age of credit.

Frankies Girl

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #10 on: July 24, 2018, 09:37:50 AM »
Credit score is figured based off of several factors, one of which is how long you've had accounts, and the other major one is your credit utilization rate. Closing your oldest ones would hurt both because the age of your credit history would change, and the amount of credit you use/have (utilization) is smaller.

Only reason I'd ever close a credit account is if it costs me money in terms of annual fees or such. Otherwise, no upside to me for dropping it. And I have near as dammit perfect credit score, with no need to worry about it anyway.

I'd likely just toss the cards into a drawer and ignore them (or put one small reoccurring charge on them for autopay so they don't close them for inactivity - I have one card set to pay my cell bill and it gets auto paid each month so I don't even have to think about it).

erutio

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Re: Closing oldest credit cards' effect on credit score, if any?
« Reply #11 on: July 24, 2018, 09:43:51 AM »
One negative a few people have been mentioning is the reduction in your average age of accounts.

But your positive tradeline will stay on your report for 10 years after you close it.  So closing an account will not negatively affect your credit score for another 10 years.

But like you mentioned, just store it in a drawer, and forget it exists.  Or cut it up.