advice on closing some card accounts

[Anonymous]

i'm considering closing some card accounts i have that charge annuals fees. there's a common myth that closing an account that's years old will drop your ceedit score, but i've been told that's false because even closed accounts will continue to age on credit reports and can remain on your report for 10 years. is that true?

re the cards, i have a merrick card and a cap one that i rarely use these days and they have no rewards. keeping them costs me money, but they're my oldest cards. the limits are relatively low. nowadays i could get one new card with a higher limit than these two combined, so i'm not worried about utilization. should i close the accounts?

[kdm31091]

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@Anonymous wrote:

i'm considering closing some card accounts i have that charge annuals fees. there's a common myth that closing an account that's years old will drop your ceedit score, but i've been told that's false because even closed accounts will continue to age on credit reports and can remain on your report for 10 years. is that true?

re the cards, i have a merrick card and a cap one that i rarely use these days and they have no rewards. keeping them costs me money, but they're my oldest cards. the limits are relatively low. nowadays i could get one new card with a higher limit than these two combined, so i'm not worried about utilization. should i close the accounts?

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Yes, the closed accounts age for the next 10 years. So as far as impacting AAOA it will not.

It can hurt your score if closing the account will drop your available credit total significantly. For example, if you have 3 accounts, one for $2k, one for $3k and one for $20k, obviously closing the $20k is going to hurt your score because your available credit is significantly dropping. Closing the $2k would be no big deal in comparison.

I am a believer that if a card no longer works for you, especially with an annual fee, close it. No sense wasting time and money on an account you don't want. Assuming the utiliation will not suffer adversely, I'd close them.

[needtodobetter]

This is good information - thanks for sharing.  

[Anonymous]

thanks for the reply. so i reviewed all of my accounts and there are actual four i'd consider closing, all because of annual fees for cards that don;t give me any rewards. one of my cap one accounts had a $39 fee due the first of next month. i contact cap one to see if they'd waive the fee. they said the fee is part of the contract and they can't waive it...so i told them to go ahead and cancel the account.

i must admit it felt great. the limit was only 1750. the account is several years old, but i can't stomach the idea of paying for nothing, esp. when cap one could waive the fee. i mean, it's their contract. they don't have to waive it, but they could. anyway. i feel a little freer. even if they'd waived the fee, i still don't want the card anymore so i guess this is actually the best outcome.

i think the merrick account will be next. i've never had a problem w/ merrick and i've really appreciated them. but i've reach a point where i think i can get any card i want and with high limits. great rewards for fees or rewards without a fee. i doubt merrick will waive fee, so even though it's one of my oldest accounts i think i'm going to cancel it. just can't continue to spend money for nothing.

i think what i'll do is wait a couple of months, app for one more card and then cancel the remaining cap one cards and the merrick card. that way my available credit and utilization won't drop and my avail. credit will go up slightly and my ut. will drop slightly.

[morgacj2004]

The advice I have been given was only to close old accts if there is an AF, you are not using the card and there is no benefit from using the card. Otherwise if you have a limited credit hx it is best to keep the cards open esp if they are older accts.