Should I close my oldest credit card?

[Bcutiebooti]

I have had military star card since 2005 and recently noticed that my credit limit should be substantially higher. I contacted them and they said the system randomly looks at you once a yr and if you've had so much as 1 late payment you do not get a CLI.

She then told me I could PIF then close the acct and open a new account. That would give me the CLI I wanted instantly.

BTW I took out several loans in 2005 and paid them off without missing any payments. Not sure if this information will help with the advice you guys give me.


Questions: Is it better to have more available credit or a longer payment history? I know that at this point I would be approved for $5-$6,000.

Thanks!!

[DiabolicallyRandom]

From a scoring standpoint, it would be better to have the longer history. With that being said, even if closed the account will still report for about another 10 years. Limits only matter in regards to your utilization. Some believe that they make a difference when it comes to future approvals, but I have gotten large approvals with only smaller limits reporting.  Is it the Master Card version?  If you don't really have a need for a larger limit with them, I would just wait it out and save the inquiry for something that may be more useful for you.

[Bcutiebooti]

Thank you for responding. I am new to this site and was under the impression that a larger amount of available credit would raise my score as long as I kept the balance below 15% and paid it off every month. I am just looking to do the best thing for my score as I am looking to purchase a home within the next year.

As far as the card, I would have applied for the traditional star card not the chase version. I know I would be guaranteed approval for the star version. Not sure about the chase version.

[DiabolicallyRandom]

Youre welcome.

I would just leave it alone since you are looking to purchase a new home.  A new account would lower your average age of accounts and would most likely drop your score.  The limit really has no effect on scoring.  For optimal scoring you just want a balance to report on one card between 1 and 9%.  The general rule of thumb when looking to purchase a home is no inquiries for at least 6 moths prior to applying. 

[RobertEG]

If you close the card and open a new account, I would speculate that they may delete all reporting of the old account.

That would eliminate any need to update anything on the account.

If they chose to delete the old account, you would lose its age.

I would not risk loss of the age of an 8 year old account over an increase in credit limit.