Credit Cards

[FutureBillionaire]

I have a Kroger 123 rewards card that is terrible with rewards.  I have used it for balance transfers before, but the limit is only 5k.  I'm considering cancelling this card and apping for an Amex for backdating or getting a Chase Freedom.  It is one of my older accounts, but it is my understanding that account age accrues for closed credit cards.  I've only had credit cards for the past 2 years.

[nicholasyud]

Don't closed . Only if its come with AF

[daybreakgonesXe]

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FutureBillionaire wrote:

I have a Kroger 123 rewards card that is terrible with rewards.  I have used it for balance transfers before, but the limit is only 5k.  I'm considering cancelling this card and apping for an Amex for backdating or getting a Chase Freedom.  It is one of my older accounts, but it is my understanding that account age accrues for closed credit cards.  I've only had credit cards for the past 2 years.

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Personally, I wouldn't just close the account willy nilly, unless it has an annual fee. If it does, apply for the AMEX or Chase Freedom first, then cancel the Kroger. If it doesn't have an annual fee, just sockdrawer it! Let it age a bit more, and if you really want to never use it again, it may close on it's on in the future. Closed accounts will age for another 10 years until they drop off your report, but you lose that 5k that helps with your utilization. 5k is a great line, so you might as well keep it along with that new card limit

[FutureBillionaire]

I have about 80k in available credit.  But, you do bring up a good point.  I would probably app for Amex and then close based on the advice I'm getting.

[Creditaddict]

Did USBank take those accounts or sell them to BofA? I can't remember... but either way I thought many had luck with product changing this after the move to whichever bank it was.

[bs6054]

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daybreakgonesXe wrote

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Closed accounts will age for another 10 years until they drop off your report,

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That what we hear, but see http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-1.aspx, an interview with a Fico product manager.  He says:

An account that is open with a good history can stay on forever -- it could stay on for 20 years. The bureaus will automatically remove (a closed account) in 10 years, but that could be removed sooner if that credit card issuer decides to remove it. Once it's closed and paid off, that account then becomes inactive, and it's not uncommon for the credit card issuer after a few years or even sooner to just delete that completely, just purge it from their records.

So 10 years after closure is the maximum, could go sooner.

Lots of interesting questions in that article that are asked here all the time.  Answers are from a scoring perspective only of course!

 Will closing lesser-used low-credit limit (less than $5,000) credit cards or lines of credit harm or help our overall credit scores, given two or three other higher-limit accounts?  (You are never penalized score wise for having too much credit, whether closing hurts depends on utilization)

Is there a difference between the issuer canceling the card versus you closing it yourself? (No difference at all in scoring)

Does it impact your score any less to close a department-store card versus a bank credit card? (No,except in credit mix.  If you close all your dept stores ones, it will hurt.  Also, if you have only one type, bank vs store, better to have bank)

[daybreakgonesXe]

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bs6054 wrote:

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daybreakgonesXe wrote

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Closed accounts will age for another 10 years until they drop off your report,

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That what we hear, but see http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-1.aspx, an interview with a Fico product manager.  He says:

An account that is open with a good history can stay on forever -- it could stay on for 20 years. The bureaus will automatically remove (a closed account) in 10 years, but that could be removed sooner if that credit card issuer decides to remove it. Once it's closed and paid off, that account then becomes inactive, and it's not uncommon for the credit card issuer after a few years or even sooner to just delete that completely, just purge it from their records.

So 10 years after closure is the maximum, could go sooner.

Lots of interesting questions in that article that are asked here all the time.  Answers are from a scoring perspective only of course!

 Will closing lesser-used low-credit limit (less than $5,000) credit cards or lines of credit harm or help our overall credit scores, given two or three other higher-limit accounts?  (You are never penalized score wise for having too much credit, whether closing hurts depends on utilization)

Is there a difference between the issuer canceling the card versus you closing it yourself? (No difference at all in scoring)

Does it impact your score any less to close a department-store card versus a bank credit card? (No,except in credit mix.  If you close all your dept stores ones, it will hurt.  Also, if you have only one type, bank vs store, better to have bank)

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Thats some grade A information! Fantastic to know, thanks for posting that!!!

[FutureBillionaire]

US Bank took over the Kroger card.  I didn't even think of a product change.  Thanks for the tip!

[FutureBillionaire]

That bankrate article had good information. Thanks for sharing!

[ccnewcc]

What Amex would you app for?

Why do you want/need another card? 

Why do you want/need another card when you got 80K in aval credit?

You already got 12 cards.  How many do you need?  How much aval credit do you need?

My advice, only get credit that you need and not want.  And there will be a time to cut Kroger loose if you don't need it.  But closing Kroger will before you app won't really do anything to help approval chances.