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When I started my credit journey a couple years ago, one of the first cards I was approved for was the Total Rewards Visa. I used it to build up to other cards and then threw it in the sock drawer to be forgotten. I received a letter that because I have gone 12 months without activity, I have 90 days to use the card or they will cancel. Because I have other cards with better rewards, I highly doubt that I will use this card unless we decide to take a trip. The way I understand it is if I close it, it stays on my report for 10 years but will it stop counting towards my AAOA? I don't need any hits to that because I am under 2 years.
Should I run a small charge through it and toss it back in the drawer til next year? How do others handle the accounts you rarely use?
A small charge here and there is all it takes, though I'm about to start a monumental purge.
I agree that if the account is closed, I will be the one to close it. I don't need it to pad utilization but I don't want any hits to my AAOA. I was an authorized user on one of my husband's accounts. I removed myself a few months ago and lost almost 20 points because of the hit to my AAOA. I don't want to see that happen if I close an account.
I am going to play it safe and run something through it. I need to let it pad my AAOA for a while longer. I like the idea of a spreadsheet. Thanks for the input! I definitely am interested in how others handle these types of accounts.
@Anonymous wrote:I agree that if the account is closed, I will be the one to close it. I don't need it to pad utilization but I don't want any hits to my AAOA. I was an authorized user on one of my husband's accounts. I removed myself a few months ago and lost almost 20 points because of the hit to my AAOA. I don't want to see that happen if I close an account.
I am going to play it safe and run something through it. I need to let it pad my AAOA for a while longer. I like the idea of a spreadsheet. Thanks for the input! I definitely am interested in how others handle these types of accounts.
The AAOA hits are sort of irrelevant when we're talking closing credit cards.
We have plenty of datapoints with people hitting 850 on FICO 8 with only 8 years or even somewhat less AAOA, and since closed positive accounts stay on your account for 10 years anyway, boom. Removing AU's are a different story than personal accounts. TBH most of the truly upper echelons of credit scoring are dictated around age of oldest account anyway... I have a few anchor tradelines from the early part of my build (BOFA nee secured, DCU secured, and Zync) and will try to keep them forever to prop up my score in the future regardless of what I do to beat it down.
Every few months I simply look through the cards I'm interested in keeping and drop a charge on it. Like Nixon suggests I'm almost assuredly going to cut down a number of cards; however, I used to be in the hardcore CBC (closed by consumer) camp, now meh. Any UW that sees a positive tradeline closed by credit grantor, knows it was for inactivity on a manual review, whereas my 30/60 late on my old BOFA card which they closed on me is also obvious why they closed it (i.e. cause I was a credit dip**bleep**).
A couple years ago I would've been loath to admit this, but now everything I can is on autopay at this point and I am using Credit Karma's every week or two pulls to see if I have any balances on cards I need to handle. Was spending too much time on credit card management, just wasn't ultimately worth it.
Keep it only if you need the extra buffer for your utilization. Otherwise I'd personally close non prime lender/builder cards.
This discussion always goes in 2 directions when it comes up. Obviously you don't want to lose your oldest account for AAOA reasons. Use it pay your auto insurance 1 or 2 times per year and be done with it. Keeping things alive longer than we really want to is part of the game of credit to maintain our shiny scores. Once you get to the point of knowing you're not going to be needing a big loan for a home or car you start to not really give a $hit anymore about AAOA and just do what feels good.
Once you stop applying for stuff though your AAOA goes up faster
I may be missing something but I don't get how keeping an unused card open really "pads" AAOA? Even if the card is closed it will age the same way for 10 further years after closure. Being closed has no impact on its AAOA status.
So yes, 10 years from now it will slightly matter (but your other accounts will also be 10 years older). But for the moment of closure, I don't see much if any advantage as far as AAOA goes.
With my unused cards, I typically just close them unless they have a huge limit, very low APR, or something else to make them occasionally worthwhile. If they are not useful in any way, I just move on.