Should I or Shouldnt I???

[Ron6262]

    I am two years from CHAP 7, I am 650 to 660 on all bureaus now.  I have a new truck at a good rate, just closed on a new house last week so I am going off the grid as far as apps and purchasing for for at least a couple years.  For the past 18 months I had two crap credit cards, one from Captial One that I put $99 down to get a $201 credit limit and an unsecured from Orchard bank for $300.  Both have yearly fees. 

     I just app'd and was accepted for a Discover care $1000 and for a decent Cap One with no yearly fee the first year and $39 after that.

     I know the rule is dont cancel, but I am thinking of at least cancelling the stupid $201 limit Crap One card and I would imagine I get my $100 deposit back at least and no more yearly fee.

      THis would leave me $2300 in available credit and I dont even use the cards except for a couple dollars on Itunes a month just to show something.

      Any thoughts????

[RobertEG]

Their is no "rule" not to close accounts, just caution of the potential impact.  The potential impact may well be worth the benefits, such as avoiding annual fees.

Closing does not remove the account from scoring in your AAoA, but it does, if paid, remove its CL from your % util calculation.  For low-limit cards, if you have other higher CL cards, the impact may be small.

A potential hidden risk is that after closure, the creditor may decide to delete the account entirely, thus avoiding any need to manage the account or any chance of a later dispute over adverse items reported under the account.  If they choose to delete, you will of course loose any benefit in your AAoA calculation if its age is greater than your current AAoA.

No simple "dont do it" rule.......