How Big of a Hit to My FICO Score to Close an Active Account?

[Anonymous]

I just received notice from Chase that in Oct 2008 they'll be changing my fixed 8.99 APR to a variable APR (Prime, which they say is 5% plus 26.99...with a maximum APR of 29.99).  I can "opt out", which means closing the account.  Since I'm not using it, I don't care about it not being available, but am wondering how big of a hit I'll take on my FICO.  While I have a balance on this card, the full available credit makes up 7.8% of my overall available credit across all of my cards.

[Anonymous]

Okay, so after posting that question it came to me that perhaps my better option would be to apply for a new card, do a BT, and be done with the Chase card.  Thoughts?

[llecs]

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LivinOnADime wrote:

I just received notice from Chase that in Oct 2008 they'll be changing my fixed 8.99 APR to a variable APR (Prime, which they say is 5% plus 26.99...with a maximum APR of 29.99).  I can "opt out", which means closing the account.  Since I'm not using it, I don't care about it not being available, but am wondering how big of a hit I'll take on my FICO.  While I have a balance on this card, the full available credit makes up 7.8% of my overall available credit across all of my cards.

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Closing account means you could take a hit in history......10 years from now. A good account will stay on for 10 years after you close it. So, if this is your oldest account by a good margin, then 10 yrs from now, you may end up taking a hit.

It can affect your utilization. Closing the account will raise your utilization which will lower your scores if you carry balances.

Don't close the card until you pay it off! And remember, you could always use it when you need to and PIF before any interest hits.

[llecs]

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LivinOnADime wrote:

Okay, so after posting that question it came to me that perhaps my better option would be to apply for a new card, do a BT, and be done with the Chase card.  Thoughts?

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That would work too. Remember, you'll take a hit if your new CC CL is lower than Chase's.

And forgot to add....if this is your only open CC, then closing it would mean a significant point decrease due to the mix of credit (or lack of).

[Anonymous]

The Chase account is relatively new.  Probably opened in the last two years.  Payment history is good, but I just haven't been able to pay it off.  Sounds like I probably should keep it open...even if I opened another card and did a BT.  That's fine.  I don't have the ability to pay off the balance completely at this point.

I still have my thinking cap on and am wondering if I should take out a loan from my credit union to do some debt consolidation for this Chase card and another Chase card with a 20.99% APR.  If I combine the two payments that I'd been making to Chase and apply them to the loan (assuming I could get one with a <10% interest rate), I should be able to pay that off faster than if I was paying each card independently and I wouldn't be dealing with Chase.  Thoughts?

[Anonymous]

Your CU may want to hold both cards during the period you are paying back the loan that wipes clean the credit card debt. Make sure they don't making CLOSING the accounts a precondition of the loan. You want those accounts open to anchor your history 10 years in the future.

[Anonymous]

Even if you close it- the UTL is counted until the balance is zero-

[marty56]

I would also add the some companies may not offer you a CC if you have cancled one with them in the past.  I think Capitol 1 does this.