topic Re: Should I close one credit card if I rolled balance to a NEW credit card? in Credit Cards

Should I close one credit card if I rolled balance to a NEW credit card?

Anonymous — Wed, 04 Feb 2009 03:25:49 GMT

I recently rolled a balance to a new credit card. Should I close the old one yet? Is it hurting my FICO score to keep it open or not?

Re: Should I close one credit card if I rolled balance to a NEW credit card?

Red1Blue — Wed, 04 Feb 2009 03:26:34 GMT

You close the card only if there is an Annual Fees. Other wise leave the card alone and let it age.

Re: Should I close one credit card if I rolled balance to a NEW credit card?

Anonymous — Wed, 04 Feb 2009 03:57:21 GMT

You asked about FICO scores, rather than financial savings (annual fees, etc). From a purely FICO-based perspective, closing the card would raise your utilization (which lowers your score), as you would lose an open line of credit and therefore have a higher balance to limit ratio, although the TL would remain on your reports for 7-10 years after you close it. Closing the account does not erase any negative payment history that may be associated with the account, unfortunately, although the impact of such negative items gradually decreases with time. This increase occurs whether the account is open or closed, though, so I'd leave the account open, unless it has an annual fee.

Like the previous poster said, if the card has an annual fee, then it might make financial sense to close it, although your FICO score would almost surely take a hit when you close it.

Re: Should I close one credit card if I rolled balance to a NEW credit card?

haulingthescoreup — Fri, 06 Feb 2009 23:08:24 GMT

Hi, 2thfery (Tooth Fairy?), welcome to the forums!

You've gotten good advice. Please read Closing Credit Cards for a good explanation of this.

In addition, if you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.

Message Edited by haulingthescoreup on 02-06-2009 03:08 PM

Re: Should I close one credit card if I rolled balance to a NEW credit card?

oracles — Wed, 04 Feb 2009 04:10:10 GMT

@Anonymous wrote:
You asked about FICO scores, rather than financial savings (annual fees, etc). From a purely FICO-based perspective, closing the card would raise your utilization (which lowers your score), as you would lose an open line of credit and therefore have a higher balance to limit ratio, although the TL would remain on your reports for 7-10 years after you close it. Closing the account does not erase any negative payment history that may be associated with the account, unfortunately, although the impact of such negative items gradually decreases with time. This increase occurs whether the account is open or closed, though, so I'd leave the account open, unless it has an annual fee.

Like the previous poster said, if the card has an annual fee, then it might make financial sense to close it, although your FICO score would almost surely take a hit when you close it.

Kudos to you annointed

Very good explanation