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Established Contributor
heirophant
Posts: 532
Registered: ‎11-25-2007
0

Effect of closing a CC before 1 year

Just wondering becuase I am considering closing my Blue b/c the CLD me to $500 (from 1K) and I really don't need the account.  I still have my Green and it lets me charge just like normal.  I'd never carry a balance w/Amex anyway, so I don't see the need for having the 2 cards.  I just don't want any cards with a limit under 1K since all of my cards are now at or above that.  Came out of the blue, too (no pun intended).  I checked my reports, nothing new bad in the last 2.5 years and no new accounts since I got my Green in May.  I'm just a little ticked about it.  ....And the letter said too many inquiries and my balances are too high...and I've had no inquiries since May...and my Credit score is too low.  Now 662 according to EX.  I was approved with a 622.  BTW, my Blue balance is $0.  Overall Util 14%.  Those are lame reasons.  Seems like their system is arbitrary.

 

So, I guess the meat and bones of the question is should I wait until a year and then close it?  I am wondering because I know accounts under a year hurt your score.  Does this also count for closed accounts?  How does that work?

FICO's: TU: 682 EX: 688 EQ: Unknown

In my wallet (strikethough are getting the axe soon): Amex Rewards Plus Gold | BECU: 10,000 | AlaskaUSA FCU: 6,900 | Citi Forward 6,500 | BOA Travel Rewards: 5,000 | US Bank Cash+: 5,000 | Merrick: 4,200 | Chase Freedom: 3,500 | Juniper: 3,100 | Household: 2,450 | Best Buy Reward Zone: 2,000 | Cap1: 1,500 | Cap1: 750 | Bailey's Furniture: 3,100 | Lowes: 4,500 | Care Credit: 2,000 | Zales: 1,400 | Kohls: 400 | Sam's: 5,200 | Walmart: 1,100 | Discover More: 1,000
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Effect of closing a CC before 1 year


heirophant wrote:

Just wondering becuase I am considering closing my Blue b/c the CLD me to $500 (from 1K) and I really don't need the account.  I still have my Green and it lets me charge just like normal.  I'd never carry a balance w/Amex anyway, so I don't see the need for having the 2 cards.  I just don't want any cards with a limit under 1K since all of my cards are now at or above that.  Came out of the blue, too (no pun intended).  I checked my reports, nothing new bad in the last 2.5 years and no new accounts since I got my Green in May.  I'm just a little ticked about it.  ....And the letter said too many inquiries and my balances are too high...and I've had no inquiries since May...and my Credit score is too low.  Now 662 according to EX.  I was approved with a 622.  BTW, my Blue balance is $0.  Overall Util 14%.  Those are lame reasons.  Seems like their system is arbitrary.

 

So, I guess the meat and bones of the question is should I wait until a year and then close it?  I am wondering because I know accounts under a year hurt your score.  Does this also count for closed accounts?  How does that work?


When it comes to closing cards, you should be most concerned with changes in your util. Closing this card will not change your credit history length or average-age of accounts. A CC card less than one year old will have a negative impact until it hits it's 1 year anniversary, it doesn't matter if the card is open or closed in your situation. Your credit mix shouldn't take a hit either.

Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Established Contributor
heirophant
Posts: 532
Registered: ‎11-25-2007
0

Re: Effect of closing a CC before 1 year


fused wrote:

heirophant wrote:

Just wondering becuase I am considering closing my Blue b/c the CLD me to $500 (from 1K) and I really don't need the account.  I still have my Green and it lets me charge just like normal.  I'd never carry a balance w/Amex anyway, so I don't see the need for having the 2 cards.  I just don't want any cards with a limit under 1K since all of my cards are now at or above that.  Came out of the blue, too (no pun intended).  I checked my reports, nothing new bad in the last 2.5 years and no new accounts since I got my Green in May.  I'm just a little ticked about it.  ....And the letter said too many inquiries and my balances are too high...and I've had no inquiries since May...and my Credit score is too low.  Now 662 according to EX.  I was approved with a 622.  BTW, my Blue balance is $0.  Overall Util 14%.  Those are lame reasons.  Seems like their system is arbitrary.

 

So, I guess the meat and bones of the question is should I wait until a year and then close it?  I am wondering because I know accounts under a year hurt your score.  Does this also count for closed accounts?  How does that work?


When it comes to closing cards, you should be most concerned with changes in your util. Closing this card will not change your credit history length or average-age of accounts. A CC card less than one year old will have a negative impact until it hits it's 1 year anniversary, it doesn't matter if the card is open or closed in your situation. Your credit mix shouldn't take a hit either.


So, I guess what I am trying to ask is, does that less than 1 year ding then last for 10 years on my credit report because the account was less than a year old when closed.  If I can escape the ding for 10 years by keeping it open for a couple of more months, I'll do it.

FICO's: TU: 682 EX: 688 EQ: Unknown

In my wallet (strikethough are getting the axe soon): Amex Rewards Plus Gold | BECU: 10,000 | AlaskaUSA FCU: 6,900 | Citi Forward 6,500 | BOA Travel Rewards: 5,000 | US Bank Cash+: 5,000 | Merrick: 4,200 | Chase Freedom: 3,500 | Juniper: 3,100 | Household: 2,450 | Best Buy Reward Zone: 2,000 | Cap1: 1,500 | Cap1: 750 | Bailey's Furniture: 3,100 | Lowes: 4,500 | Care Credit: 2,000 | Zales: 1,400 | Kohls: 400 | Sam's: 5,200 | Walmart: 1,100 | Discover More: 1,000
Valued Contributor
jmbfl
Posts: 1,185
Registered: ‎03-04-2008

Re: Effect of closing a CC before 1 year

The one year "ding" will last one year, open or closed. I'm not sure why you would close the account though. Why not just leave it alone. It isn't hurting anything other than your ego. I would wait 'til the dust settles with AMEX.

Established Contributor
heirophant
Posts: 532
Registered: ‎11-25-2007

Re: Effect of closing a CC before 1 year


jmbfl wrote:

The one year "ding" will last one year, open or closed. I'm not sure why you would close the account though. Why not just leave it alone. It isn't hurting anything other than your ego. I would wait 'til the dust settles with AMEX.


 

That is true.  My ego is a little bruised by it.  The only thing I can think is that they have changed their risk model and my profile no longer fits the new model, therefore, they CLD'd me.  Yeah, I should probably wait and stew over it a little more before I make a decision to close it.  That's what makes these boards special.  You can mull over important decisions with support from Others.
FICO's: TU: 682 EX: 688 EQ: Unknown

In my wallet (strikethough are getting the axe soon): Amex Rewards Plus Gold | BECU: 10,000 | AlaskaUSA FCU: 6,900 | Citi Forward 6,500 | BOA Travel Rewards: 5,000 | US Bank Cash+: 5,000 | Merrick: 4,200 | Chase Freedom: 3,500 | Juniper: 3,100 | Household: 2,450 | Best Buy Reward Zone: 2,000 | Cap1: 1,500 | Cap1: 750 | Bailey's Furniture: 3,100 | Lowes: 4,500 | Care Credit: 2,000 | Zales: 1,400 | Kohls: 400 | Sam's: 5,200 | Walmart: 1,100 | Discover More: 1,000
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Effect of closing a CC before 1 year

Now that Amex has been bailed out, there is no telling what changes will take place. We can guess, but we really don't know. It's certainly possible Amex will start restoring credit lines now that they have a blank check and access to unlimited money.

Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Valued Contributor
debtisgood
Posts: 1,126
Registered: ‎03-25-2008

Re: Effect of closing a CC before 1 year

If anything, keep it open with minimal charges and you will cost them more money in account maintenance than they will make off your purchases - that is the real way to get even with a CCC.

 

The power of the sock drawer (with occassional cheap trips out to keep them guessing)

Valued Contributor
jmbfl
Posts: 1,185
Registered: ‎03-04-2008
0

Re: Effect of closing a CC before 1 year


fused wrote:

Now that Amex has been bailed out, there is no telling what changes will take place. We can guess, but we really don't know. It's certainly possible Amex will start restoring credit lines now that they have a blank check and access to unlimited money.


 

I think this bailout is somehow related to the ongoing mess with the old accounts being reaged and posted to the CBR's. When I talked to the agent she said something about "recalculating reserves" having contributed to this error.
Frequent Contributor
GST2008
Posts: 443
Registered: ‎03-22-2008
0

Re: Effect of closing a CC before 1 year

Heirophant,  if I were you, I'd just try to run a bunch of purchase through on the Blue instead of on the Green.  If AmEx sees the activity, they will probably increase it back up.  Don't get too discouraged by the CLD.  It probably was just an arbitrary act, but I'm sure you can get the CL back up to 1k if not higher just by showing it some activity.  My brother opened a Blue about a year and a half ago (I'm AU on the account) and it seems like the more love we give the card, the higher or limit goes.  It started out as 2k and we both pushed alot of purchases through on it instead of our Gold account and they quickly increaed us to 4K then to 6K and now it's 10K.  Since the Green doesn't really report a limit anyhow and you are paying in full, try switching to the Blue and getting the limit back up.

Current:
TU (5/14/14): 796 (Inquiries; 8/23/13)
EQ (3/23/14): 791 (Inquiries: 8/23/13)
EX (9/24/13): 780 (Inquiries: 7/2/12; 11/20/12; 7/30/13; 8/23/13)

Goals: No new inquiries for 2014, 800 for all CRs by 12/31/14
Established Contributor
heirophant
Posts: 532
Registered: ‎11-25-2007
0

Re: Effect of closing a CC before 1 year

So, a continuation of this thread...a few days later.  I decided to take everyone's advice (despite my ego) and keep the card open.  So, just to show activity on the account, I went and bought gas the other night (Monday).  It authorized $100, so I had $400 available credit.  Well, the charge has posted and the available credit hasn't updated to be $470 (only $30 in gas).  Seems weird since the charge posted to my account on Tuesday.  Hope that's not an ominous sign.  If it doesn't update by the weekend, I'm calling Amex to see what's up and I am going to ask them outright if they are planning to close my card at the next statement.  If the answer is yes, I am going to close it.  I am paying it in full tommorrow in anticipation.
FICO's: TU: 682 EX: 688 EQ: Unknown

In my wallet (strikethough are getting the axe soon): Amex Rewards Plus Gold | BECU: 10,000 | AlaskaUSA FCU: 6,900 | Citi Forward 6,500 | BOA Travel Rewards: 5,000 | US Bank Cash+: 5,000 | Merrick: 4,200 | Chase Freedom: 3,500 | Juniper: 3,100 | Household: 2,450 | Best Buy Reward Zone: 2,000 | Cap1: 1,500 | Cap1: 750 | Bailey's Furniture: 3,100 | Lowes: 4,500 | Care Credit: 2,000 | Zales: 1,400 | Kohls: 400 | Sam's: 5,200 | Walmart: 1,100 | Discover More: 1,000

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