Opinion on dropping Credit Card

Anonymous · ‎10-05-2015

Background: BK in Jan '10, found job later in year and have steadily built finances back by living on cash and establishing credit with secured card.

Current: Almost two years ago we purchased a budget minded house ($82K at 3.75%) and plan for this to be our final. We now have 2 Visa, 1 MC, 1 Discover, 1 department store card, 1 auto loan at 0.9%, two interest free credit purchases, and two store credit lines (zero balance). No credit card balances are carried forward monthly and we have not had a late payment since the BK. Our total credit limit is over $22K with one card willing to go another $7K but I kept it at $12K for some reason. None of the credit cards have annual fees. Two of the credit cards are 1.5% cash back. Our credit score ranges between 680 and 699 (never breaking 700 for some reason.) I suspect that when the write-offs fall off the reports at the end of Summer 2016 we'll see the score jump somewhat. We are in our early 60s.

One of our earlier cards but not the oldest does not offer cash back and is not offering to increase the $2K credit limit.

Question: Is there any reason we need to hold on to this card. If not, would it be better to cancel the card or just let it die on the vine?

Thanks.

CH-7-Mission-Accomplished · ‎10-05-2015

@Anonymous wrote:
Background: BK in Jan '10, found job later in year and have steadily built finances back by living on cash and establishing credit with secured card.

Current: Almost two years ago we purchased a budget minded house ($82K at 3.75%) and plan for this to be our final. We now have 2 Visa, 1 MC, 1 Discover, 1 department store card, 1 auto loan at 0.9%, two interest free credit purchases, and two store credit lines (zero balance). No credit card balances are carried forward monthly and we have not had a late payment since the BK. Our total credit limit is over $22K with one card willing to go another $7K but I kept it at $12K for some reason. None of the credit cards have annual fees. Two of the credit cards are 1.5% cash back. Our credit score ranges between 680 and 699 (never breaking 700 for some reason.) I suspect that when the write-offs fall off the reports at the end of Summer 2016 we'll see the score jump somewhat. We are in our early 60s.

One of our earlier cards but not the oldest does not offer cash back and is not offering to increase the $2K credit limit.

Question: Is there any reason we need to hold on to this card. If not, would it be better to cancel the card or just let it die on the vine?

Thanks.

If there is no annual fee, I would keep it and charge $5 at the grocery store every six months.

FICO scoring looks at your average age of accounts, how long you have been on file with them, and the age of your oldest credit card. As old closed cards fall off your report, you lose them in terms of the oldest credit card. For this reason it is nice to have one card that is as old as you can get it. For a lot of people this is an old store card like Nordstrom or Macy's that they have had for 20 or 30 years.

Anonymous · ‎10-05-2015

@Anonymous wrote:
Background: BK in Jan '10, found job later in year and have steadily built finances back by living on cash and establishing credit with secured card.

Current: Almost two years ago we purchased a budget minded house ($82K at 3.75%) and plan for this to be our final. We now have 2 Visa, 1 MC, 1 Discover, 1 department store card, 1 auto loan at 0.9%, two interest free credit purchases, and two store credit lines (zero balance). No credit card balances are carried forward monthly and we have not had a late payment since the BK. Our total credit limit is over $22K with one card willing to go another $7K but I kept it at $12K for some reason. None of the credit cards have annual fees. Two of the credit cards are 1.5% cash back. Our credit score ranges between 680 and 699 (never breaking 700 for some reason.) I suspect that when the write-offs fall off the reports at the end of Summer 2016 we'll see the score jump somewhat. We are in our early 60s.

One of our earlier cards but not the oldest does not offer cash back and is not offering to increase the $2K credit limit.

Question: Is there any reason we need to hold on to this card. If not, would it be better to cancel the card or just let it die on the vine?

Thanks.

I have a card just like that. 2k and probably won't move even though the same bank has given me much larger limits on cards plus a 1.99 car loan. I have debated the same thing and for now have decided to keep it for a couple of more years until some of my new accounts age. I know accounts stay on your report for ten years, but I still think I will keep it. At least for now. I guess you have to decide the pros and cons. I am sure you will get excellent advice here in the forum.

Anonymous · ‎10-05-2015

@Anonymous wrote:
Background: BK in Jan '10, found job later in year and have steadily built finances back by living on cash and establishing credit with secured card.

Current: Almost two years ago we purchased a budget minded house ($82K at 3.75%) and plan for this to be our final. We now have 2 Visa, 1 MC, 1 Discover, 1 department store card, 1 auto loan at 0.9%, two interest free credit purchases, and two store credit lines (zero balance). No credit card balances are carried forward monthly and we have not had a late payment since the BK. Our total credit limit is over $22K with one card willing to go another $7K but I kept it at $12K for some reason. None of the credit cards have annual fees. Two of the credit cards are 1.5% cash back. Our credit score ranges between 680 and 699 (never breaking 700 for some reason.) I suspect that when the write-offs fall off the reports at the end of Summer 2016 we'll see the score jump somewhat. We are in our early 60s.

One of our earlier cards but not the oldest does not offer cash back and is not offering to increase the $2K credit limit.

Question: Is there any reason we need to hold on to this card. If not, would it be better to cancel the card or just let it die on the vine?

Thanks.

The question is: Are you going ot use it? If not, you should consider closing it. If you're willing to monitor for action, you might as well leave it open and just sock drawer it until it gets closed by the issuer. However, if you don't want to check on it, you should probably just close it. It will report for 10 years and is only 10% of your utilization, so it won't have a material impact on your scores.

Anonymous · ‎10-05-2015

What credit card is it?

Anonymous · ‎10-05-2015

@Anonymous wrote:
What credit card is it?

This could be important; even if you don't want to say, you could check to see if that card's issuer has another credit card you like and would actually use. Then give them a call and ask to convert your current card to that new one...this will give you a new card you'll actually use and still maintain your AAOA.

mitchblue · ‎10-05-2015

If there's no differnce on your CR, if you close it vs them closing it I'd just put it away. No harm no foul.

FICO® 8 Scores 821 FICO® 9 Equifax 826 (Updated 02-7-23)

Anonymous · ‎10-05-2015

The card is a Visa from Merrick Bank. They only offer this one and a secured Visa.

I opened it a few months after I received a Capital One MC probably around fall 2011. My policy has been and continues to be all offers that aren't free of annual fees get shredded. This one came "Pre-Approved" and no annual fee and it was approved over the 800 number. I monitor it online and have threshold alerts. I assume it's a great card for credit builders but we're a little beyond that now.

The Capital one has since been upgraded to their 1.5% cash back but the CL has stagnated at $2,250 for the last two years.

Anonymous · ‎10-05-2015

I would keep it as long as it isn't costing you anything. If you're going to keep it remove it from your wallet and all of your online account to avoid charges and hook it up to Mint or Finovera or a similar service that will alert you of new charges. I have a second Finovera account just for the 4 cards I don't use which means I don't have to login and monitor them but they still help my AAOA.

Anonymous · ‎10-05-2015

On the other hand, keeping a card that's 'not costing anything' could cost big time if there are fradulent charges you're not monitoring. Meaning you're responsible if those charges aren't disputed.

I don't advocate keeping anything open you're no longer going to use. Had I followed their advice and kept my oldest card open I'd still be dealing with CreditOne. Enough said!