cancelling a credit card

[Anonymous]

i use WF as my bank for checking purposes, but they are showing trends of applying different types of fees to have a "free" checking account.  i don't like it, and have decided to move on to a checking-type account with my brokerage firm instead.

with WF i also have a credit card.  i only get 1% back on the card, and i rarely use it as i have a fidelity rewards card that gets 2% cash back on everything, which i am far more partial to using.  however that card is an amex, so it would be smart to also have a visa/mastercard since many places do not take amex.

my plan would be to close both the WF checking account and the WF CC, and then later apply for a travel rewards visa or some better card.  i have only had a credit card for about 3 years and have only had a car loan for 1 year, so overall i have a very short credit history.  however, i pay everything on time and my utilization ratio is always under 30%, every cycle.  even with low history, i assume my credit standing is quite good.

can any of you see any ramifications of me closing the WF credit card after having it only 2-3 years?  i am just hoping it doesn't *hurt* my credit by closing it.  i just know i can get a better card to replace it and want to absolve myself from having to deal with WF at all as soon as possible.

[LTomBerry]

The traditional answer would be to not close it, but instead to "sock-drawer" it and not use it. If you close a card it will affect your AAoA - average age of accounts, which will affect your score to some degree. It will still show up on your report for around 10 years, but it will show closed which is not as good as open.

Having said that, if a card is charging you annual or other fees or is just generally a pain in the neck, you might as well close it sooner rather than later. Saving money and/or your sanity is worth more than having a few more points on your score.

[Anonymous]

Closed accounts are calculated into your AAoA.

[Anonymous]

thanks for the quick responses.

so how "much" would it affect my score by closing?  if it's something marginal that would be repaired by paying on time for all my other cards over the next 2 months...that's kind of a "meh" situation for me.  however if it's something that could ultimately cost me a mortgage, i would probably rather sock drawer it.

are there any drawbacks to putting it in your drawer and literally not spending a dime on it for 10 years?

[Guava]

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@LTomBerry wrote:

The traditional answer would be to not close it, but instead to "sock-drawer" it and not use it. If you close a card it will affect your AAoA - average age of accounts, which will affect your score to some degree. It will still show up on your report for around 10 years, but it will show closed which is not as good as open.

Having said that, if a card is charging you annual or other fees or is just generally a pain in the neck, you might as well close it sooner rather than later. Saving money and/or your sanity is worth more than having a few more points on your score.

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+1 espcially if WF is your only card

Closing the card doesn't hurt you right away. If you're looking for mortgage soon, closing your only card isn't the best thing to do. Just keep it open, spend it sparingly on small things (every 6 months or so) so WF doesn't close it due to inactivity

[Anonymous]

WF is not my only card, i have a fidelity amex also.

[Guava]

Then I would go with TomBerry's words: If the card has an annual fee and is a pain in the neck, close it. Otherwise no harm in keeping it open, it'll help with your AAoA and utilization percentage

[MarineVietVet]

If you haven't read it already here is a great thread talking about the pros and cons of Closing Credit Cards

.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[kjm79]

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@LTomBerry wrote:

The traditional answer would be to not close it, but instead to "sock-drawer" it and not use it. If you close a card it will affect your AAoA - average age of accounts, which will affect your score to some degree. It will still show up on your report for around 10 years, but it will show closed which is not as good as open.

Having said that, if a card is charging you annual or other fees or is just generally a pain in the neck, you might as well close it sooner rather than later. Saving money and/or your sanity is worth more than having a few more points on your score.

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Closing the account WILL NOT lower your AAoA.  What it will lower is your available credit and that may or may not affect your utilization.  When you close the card you lose the credit line that came with it.  As long as you can manage your other lines, you'll be fine.  If you want a new card, app while you still have the WF CC and it's line, just to help your UTIL.  After you get the new card then go ahead and close the WF if you still want to.  Or as suggested sock-drawer and let it age a bit until it's closed due to inactivity.  The tradeline will contiue to report and be included in your AAoA for 10+ years from the the closing date. 

[Anonymous]

thank you for that information.  the card was an introductory card since i had never owned a credit card prior to this one.  so, the limit they gave me was 2,800, which is low compared to the 7,500 on my amex.  i even applied for an increase with WF well after i got a car loan and after approved for my fidelity amex, and yet WF would not increase the 2,800 limit at all, which i thought was weird. 

at any rate, it's not a great card.  while there are no fees, the 2% cash back amex card gets used way more often, so if i had to have a visa card, i'd rather have one that did a little bit for me like the cap one venture travel rewards, which is the one i'm eyeing.  i'm also 6'6", and flying without being in an exit row seat is not fun, so the extra miles and getting status is a huge plus for me with the venture visa.