Should I close a no-rewards credit card?

[ficoChanger]

I got a notice from GE Money that my Chevron card will expire unless I use it by the end of the month.  I never use my Chevron card because it doesn't give me any points or rewards like my other credit cards.  It has a low limit, it isn't my oldest credit card on record, and I always pay off my cards every month.  If I let it expire, will that have a very small effect on my credit score or should I keep the card active?

[gdale6]

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@ficoChanger wrote:

I got a notice from GE Money that my Chevron card will expire unless I use it by the end of the month.  I never use my Chevron card because it doesn't give me any points or rewards like my other credit cards.  It has a low limit, it isn't my oldest credit card on record, and I always pay off my cards every month.  If I let it expire, will that have a very small effect on my credit score or should I keep the card active?

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I dont advocate closing accounts unless there is a fee of some sort, this cards limit can grow very quickly with minimal use, I now keep it around just for util purposes.

[Open123]

Unless it's one of your oldest TLs or has an extremely low APR you'd like to utilize, I see no reason to keep a card open, just for the sake of having it open.

[longtimelurker]

So you have just had the two viewpoints that always occur with this question:

1) If it doesn't have an AF, it does no harm, keep it open.

2) If it doesn't do any particular good, and is not used, may as well close.

Rarely get agreement between the camps.   I think a lot depends where you are in your credit life, early on or after rebuilding, each TL is important, and utilization is monitored, leading to view 1).   With thick files, and cards with high CLs, keeping a low CL card doesn't help anything significantly, and as people want less clutter, this leads to view 2.

But of course there are people with thick files who still have view 1, and same for view 2.

I think it really doesn't matter very much, there are very small pros and cons to each, so just do what seems most comfortable.

[red259]

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@ficoChanger wrote:

I got a notice from GE Money that my Chevron card will expire unless I use it by the end of the month.  I never use my Chevron card because it doesn't give me any points or rewards like my other credit cards.  It has a low limit, it isn't my oldest credit card on record, and I always pay off my cards every month.  If I let it expire, will that have a very small effect on my credit score or should I keep the card active?

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Its up to you. I normally would not close a credit card that has no AF. However, if you do not use the card and you have a thick file and the card has a small credit line then its ok to dump it. It all depends on your credit profile and what your comfortable with. By the way it will stay on your credit report for years to come.

[takeshi74]

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@ficoChanger wrote:

If I let it expire, will that have a very small effect on my credit score or should I keep the card active?

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No idea.  We can't tell you how your scores will be affected.  What you can do to help you in your decision making is calculate your utilization before and after closing.  Most of the impact from closure is due to changes in utilization.  AAoA isn't immediatly affected.

[coldnmn]

If you don't use it and doesn't affect utilization I would close it. In my opinion it looks better that you close it rather then closed by them on your credit report. It still reports as a poitive TL for ten years.

[ezdoesit]

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@coldnmn wrote:

If you don't use it and doesn't affect utilization I would close it. In my opinion it looks better that you close it rather then closed by them on your credit report. It still reports as a poitive TL for ten years.

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I agree I would rather my report say "closed by consumer".  If you have a low limit and they have not increased it why keep it open, if you have decent CL then how much could it really affect util.  I am just guessing because you didn't supply that info.

[SunriseEarth]

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@longtimelurker wrote:

So you have just had the two viewpoints that always occur with this question:

1) If it doesn't have an AF, it does no harm, keep it open.

2) If it doesn't do any particular good, and is not used, may as well close.

Rarely get agreement between the camps.   I think a lot depends where you are in your credit life, early on or after rebuilding, each TL is important, and utilization is monitored, leading to view 1).   With thick files, and cards with high CLs, keeping a low CL card doesn't help anything significantly, and as people want less clutter, this leads to view 2.

But of course there are people with thick files who still have view 1, and same for view 2.

I think it really doesn't matter very much, there are very small pros and cons to each, so just do what seems most comfortable.

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+1.

For someone like yourself, it would only be good to keep open if it's part of your UTIL strategy (including having enough accounts with zero balances).  If not, then closing might be best.  

[ficoChanger]

Thanks everyone for the advice.  I'm going to keep the card open since it is one of my three credit accounts and so it does contribute to my overall credit utilization.