topic Re: Should I Close my oldest account? in Credit Cards

Should I Close my oldest account?

Anonymous — Tue, 25 Sep 2018 17:32:22 GMT

I know I know I know you all are gonna yell “you should never close your oldest account!” But here is the thing:

I actual first credit card account is a secured credit card, but the bank I had it with doesn’t allow me to “get out of it” after 6 months or any length of time, I must CLOSE it after I’m qualified for a non secured card.

During that 6 months, I got mail offer from Credit One. At the time I know nothing about credit cards, seriously, nothing. I was just happy I got qualified for a “real” card, didn’t think much and I applied for it and got $400 limit.

Soon after than I closed my secured card and Opened a non secured regular card with that original bank and received $1000 limit. (That card is now $3000).

So it’s almost a year old for the Credit One card, my current total combined limit from all my cards is $15,900. That credit one is still $400!! And I’m gonna get hit with an annual fee of $75 for nothing!!

I checked with Transunion simulator how my score would change after cancel that Credit One, it says it will only drop 5 points. I’m at 735. What I’m worried about is in the long run, when all my other cards are 3-5 years old and then I have this crappy card stuck at 11 months old.

So should I cancel it? I mean even though $75 isn’t really much but having a $400 card sitting there doing nothing and still charge $75, just feels bad.

Re: Should I Close my oldest account?

K-in-Boston — Tue, 25 Sep 2018 17:49:24 GMT

If your 2nd oldest account is that close in age, there's no reason to worry about closing your oldest. Sounds like it is a completely useless card for you at this point; close away. It will remain on your credit reports, continue to age from the original account opening date, and factor into your average account age for up to 10 years. At that point the age of a single account age only slightly older than your "new oldest" should not matter one bit. Score simulators are notoriously unreliable and guesswork. If closing the card doesn't cause your overall utilization % to increase and there is no balance on the card, your score should be unaffected.

Re: Should I Close my oldest account?

Medic981 — Tue, 25 Sep 2018 17:37:57 GMT

@Anonymous wrote:
I know I know I know you all are gonna yell “you should never close your oldest account!” But here is the thing:

I actual first credit card account is a secured credit card, but the bank I had it with doesn’t allow me to “get out of it” after 6 months or any length of time, I must CLOSE it after I’m qualified for a non secured card.

During that 6 months, I got mail offer from Credit One. At the time I know nothing about credit cards, seriously, nothing. I was just happy I got qualified for a “real” card, didn’t think much and I applied for it and got $400 limit.

Soon after than I closed my secured card and Opened a non secured regular card with that original bank and received $1000 limit. (That card is now $3000).

So it’s almost a year old for the Credit One card, my current total combined limit from all my cards is $15,900. That credit one is still $400!! And I’m gonna get hit with an annual fee of $75 for nothing!!

I checked with Transunion simulator how my score would change after cancel that Credit One, it says it will only drop 5 points. I’m at 735.

So should I cancel it? I mean even though $75 isn’t really much but having a $400 card sitting there doing nothing and still charge $75, just feels bad.

"Closing your oldest account is bad" is a credit myth. Your account in good standing will continue to report for up to ten years which will help with your AAoA. As long as you have other tradelines established in those ten years you won't have a significant decrease in your AAoA when it finally drops off.

What can be adverse is that your total credit available will decrease and your credit utilization could increase which can impact your FICO scores if they are above 29.9%. Utilization below 8.9% will give you an increase in your FICO scores. Just remember that utilization has no memory where FICO scores are concerned. Your FICO scores with adjust to reflect your current utilization.

Re: Should I Close my oldest account?

Anonymous — Tue, 25 Sep 2018 17:44:55 GMT

Thank you!

Re: Should I Close my oldest account?

K-in-Boston — Tue, 25 Sep 2018 17:48:06 GMT

@Medic981 wrote:
"Closing your oldest account is bad" is a credit myth...

For a very large percentage of the users here, this is going to be true. For the general public that got one credit card in college, and years later got 1 or 2 more, it's still very important. I regret learning the hard way that I shoud have kept just one of my earlier 90s accounts open as they've all long fallen off of my credit reports and I no longer have any credit history of my own prior to 2001 (and that will be 2002 in a few years when a couple of circa-2001 accounts fall off).

The reason I say it's different here is that people building or rebuilding here tend to open up a handful of accounts in a short period of time so the difference in age in usually calculated in weeks or months, rather than in numerous years or even decades between accounts.

Re: Should I Close my oldest account?

Anonymous — Tue, 25 Sep 2018 19:48:58 GMT

@K-in-Boston wrote:
@Medic981 wrote:
"Closing your oldest account is bad" is a credit myth...
For a very large percentage of the users here, this is going to be true. For the general public that got one credit card in college, and years later got 1 or 2 more, it's still very important. I regret learning the hard way that I shoud have kept just one of my earlier 90s accounts open as they've all long fallen off of my credit reports and I no longer have any credit history of my own prior to 2001 (and that will be 2002 in a few years when a couple of circa-2001 accounts fall off).

The reason I say it's different here is that people building or rebuilding here tend to open up a handful of accounts in a short period of time so the difference in age in usually calculated in weeks or months, rather than in numerous years or even decades between accounts.

I agree but there is also the question of cost vs gain. For some set of people, the oldest card is a fee-creating bottom-feeder card (like FP).

In such cases, people really need to ask themselves whether the fees saved by closing outweigh the drop of X points. IMO, people value a few points way too much. If it is going to impact the rate on a mortgage, sure, but otherwise.......

Re: Should I Close my oldest account?

sjt — Wed, 26 Sep 2018 14:02:31 GMT

Close your Credit One Card.

Re: Should I Close my oldest account?

JustBPatient — Wed, 26 Sep 2018 14:31:40 GMT

Close it, and continued success on your journey!!