topic Re: Closing out a new credit card with a $200 limit in Credit Cards

Closing out a new credit card with a $200 limit

kysin2014 — Thu, 24 Mar 2011 07:32:31 GMT

I wanted to know if my credit score will even be effected by closing out a credit card that was opened 11 months ago which only has a very low $200 limit to IKEA. Keep in mind that I already have 9 other credit cards that are opened. Any advice or help with this would be great.

I did the same thing with an HSBC Discover card because i...

minimock — Thu, 24 Mar 2011 07:38:13 GMT

I did the same thing with an HSBC Discover card because it was only $300, closed it the same month it was opened. I got dinged for an average of 5 points across the board.

I recovered those 5 points the next month, but you also have to factor in the inquiry too.

I dont think there is really an exact answer to the question as other things come into play, but that was my expierince.

6 months later I went on to get my first two high balance cards.

Re: Closing out a new credit card with a $200 limit

vish1 — Thu, 24 Mar 2011 11:34:50 GMT

@jinswaz wrote:
I wanted to know if my credit score will even be effected by closing out a credit card that was opened 11 months ago which only has a very low $200 limit to IKEA. Keep in mind that I already have 9 other credit cards that are opened. Any advice or help with this would be great.

Assuming that with 9 other cards, your util is not dependent of this card and won't go up.

You will have no impact on your score because of this.

Re: Closing out a new credit card with a $200 limit

Anonymous — Thu, 24 Mar 2011 12:13:39 GMT

There was a recent thread started about Ikea discontinuing and closing accounts. Looks like you won't have any choice.

ikea will no longer have a credit card

Re: Closing out a new credit card with a $200 limit

Anonymous — Thu, 24 Mar 2011 14:21:34 GMT

fused's Closing Credit Cards, stickied at the top of this Credit Cards board, is a very helpful read on the impact of closing cards.

Re: Closing out a new credit card with a $200 limit

Walt_K — Thu, 24 Mar 2011 14:56:15 GMT

It doesn't affect your Average Age of Accounts until it drops off of your report in 10 years. So no immediate effect from that. Your overall credit limit between all of your revolving accounts that report limits will be reduced by $200 which will have a minor effect on your total utilization. Probably nothing to be concerned about. There's a sticky thread on closing credit card accounts.

Re: Closing out a new credit card with a $200 limit

Anonymous — Fri, 25 Mar 2011 16:03:05 GMT

I closed a JC Penny card that I had not used since 1996 with a whopping $187.00 line.

They were still reporting monthly to EX, last report 03/2011...

My score went UP 17 points beacuse of this! Go figure...

--Ray

Re: Closing out a new credit card with a $200 limit

treefrogger — Fri, 25 Mar 2011 16:11:49 GMT

I picked up several points for closing a Target store card which had a $200 limit.

It also got rid of that listed negative factor of "You have a card with a low credit limit" in the scoring analysis.

Re: Closing out a new credit card with a $200 limit

vish1 — Fri, 25 Mar 2011 16:31:23 GMT

@treefrogger wrote:
I picked up several points for closing a Target store card which had a $200 limit.

It also got rid of that listed negative factor of "You have a card with a low credit limit" in the scoring analysis.

I feel you are looking at FAKO not FICO

Re: Closing out a new credit card with a $200 limit

haulingthescoreup — Fri, 25 Mar 2011 18:06:33 GMT

@vish1 wrote:
@treefrogger wrote:
I picked up several points for closing a Target store card which had a $200 limit.

It also got rid of that listed negative factor of "You have a card with a low credit limit" in the scoring analysis.
I feel you are looking at FAKO not FICO

I agree. That isn't a FICO scoring factor.

Re: Closing out a new credit card with a $200 limit

treefrogger — Fri, 25 Mar 2011 18:51:04 GMT

FAKO, yes.

Still, it was the reason listed by FIA for adding an annual fee to a card open since 2003 with no lates at all.

Re: Closing out a new credit card with a $200 limit

vish1 — Fri, 25 Mar 2011 21:10:12 GMT

@treefrogger wrote:
FAKO, yes.

Still, it was the reason listed by FIA for adding an annual fee to a card open since 2003 with no lates at all.

Thats just an stupid excuse they use to force people to pay them more.

Re: Closing out a new credit card with a $200 limit

haulingthescoreup — Fri, 25 Mar 2011 23:32:07 GMT

@treefrogger wrote:
FAKO, yes.

Still, it was the reason listed by FIA for adding an annual fee to a card open since 2003 with no lates at all.

A good example of how sometimes things which don't affect a FICO score do affect lender actions. Or as mentioned above, are used as an excuse.

We've had lots of anecdotal evidence that having nothing but low-CL cards can make it hard to crack that ceiling, generally requiring a CU card to break through.

Re: Closing out a new credit card with a $200 limit

SuperKirby — Sun, 14 Apr 2013 08:11:34 GMT

I'm wondering myself. I have a 4 year old $200 CL Jcpenney card I never use. Well, I spend a few dollars every 4-6 months to keep it alive. I know if I close it, it won't affect my UTL at all. But doesn't it still help my score to keep it alive? Even if by a few points?

What kind of inquiry (if any) is used for closing an account? I have no idea.

My AAoA is exactly 10 years 5 days ago! No baddies ever.

Re: Closing out a new credit card with a $200 limit

jetsfan2013 — Sun, 14 Apr 2013 19:43:46 GMT

Does this issue tend to be with store cards?

Re: Closing out a new credit card with a $200 limit

LS2982 — Sun, 14 Apr 2013 19:51:57 GMT

*****Old thread alert*****

Re: Closing out a new credit card with a $200 limit

webhopper — Sun, 14 Apr 2013 19:55:47 GMT

Hi SuperKirby and jetsfan! Welcome to MyFico Community Forums!

I see you have identified an old thread as containing some information useful to you,

I doubt that the person who originally posted this thread will be around to answer, as the thread is from 2011.

However, I can tell you with certainty that closing a CC (credit cards) does not lower your FICO scores in and of itself. When deciding to close a CC there are two important things to consider. In the short-term, closing a CC can have an adverse affect on your UTIL percentage calculations and this in itself can definitely lower your scores. In the long-term, a closed CC in good standing (nothing derogatory reporting) with a $0 balance will generally be deleted from your CRs (credit reports) after 10 years. Once this account is deleted, you lose the history and age and this might lower your scores.

For More information on how closing credit cards can impact your FICO score, please check out the following link: Closing Credit Cards.

Re: Closing out a new credit card with a $200 limit

SuperKirby — Sun, 14 Apr 2013 19:56:23 GMT

Alright so just to be clear, it won't affect me at all...

The CL on my JCPenney card is so low ($200), that it won't affect my UTIL rate at all. The card is 4 years old, and I am still using a 10 year old card today. So it won't affect my AAoA at all. However, my question was doesn't it still help improve my score if I keep it and spend a dollar on it once every 6 months? Or should I get rid of it?

Re: Closing out a new credit card with a $200 limit

LS2982 — Sun, 14 Apr 2013 19:58:42 GMT

@SuperKirby wrote:
Alright so just to be clear, it won't affect me at all...

The CL on my JCPenney card is so low ($200), that it won't affect my UTIL rate at all. The card is 4 years old, and I am still using a 10 year old card today. So it won't affect my AAoA at all. However, my question was doesn't it still help improve my score if I keep it and spend a dollar on it once every 6 months? Or should I get rid of it?

You should give GE Credit Solutions a call 1-877-379-8173

They can get that JCP limit up for you! Good luck!!!

Re: Closing out a new credit card with a $200 limit

webhopper — Sun, 14 Apr 2013 20:03:18 GMT

I agree with LS, you can likely call in and get that credit limit increased to something more usable