Canceling a credit card and replacing it with another

[Anonymous]

I have a credit card that I rarely use because the credit limit cannot be raised and it does not have any advantages to having it. I want to get a card that will have a higher credit limit and that also gives rewards for using it. The only upside to having the lower credit limit card is that I have had it for about 3 years now. How will this affect my credit score?

[Anonymous]

It will affect you if its your oldest card but if you don't pay any fees for having the card (annual fees, etc) then just leave it open.

[Anonymous]

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javi84 wrote:
It will affect you if its your oldest card but if you don't pay any fees for having the card (annual fees, etc) then just leave it open.

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It will NOT effect you if it is your oldest or newest account... The impact will come from the new account regardless of whether or not you close another. The AVG Hx will dip and there will likely be a new INQ for the new account to consider, but the impact is negligable in most cases. And scores rebound shortly after.

The only difference will be the loss in available credit for revolving Utilization... Hx remains on your CRs for a period of NO LESS than 10 years.

If you replace the available credit with the same or more all will be fine.

Rob

[Anonymous]

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It will NOT effect you if it is your oldest or newest account... The impact will come from the new account regardless of whether or not you close another.

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This is why I hate FICO scores, there is too much contradicting info that affects our finances. The way I understood it was not to close your oldest CC, it would delete good credit history and lower your overall history. Now you're saying it makes no difference? Or it wont make a difference if you close one and open another? If so then which one do we have to do first, open the new CC then close the old one or close the old one then open the new one? I'm so confused now!!!

[Anonymous]

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javi84 wrote:

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It will NOT effect you if it is your oldest or newest account... The impact will come from the new account regardless of whether or not you close another.

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This is why I hate FICO scores, there is too much contradicting info that affects our finances. The way I understood it was not to close your oldest CC, it would delete good credit history and lower your overall history. Now you're saying it makes no difference? Or it wont make a difference if you close one and open another? If so then which one do we have to do first, open the new CC then close the old one or close the old one then open the new one? I'm so confused now!!!

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The only FICO effect will be the new accounts impact on AVG Credit Hx and the INQ required to get the account and any impact to overall available revolving credit... If you replace the available credit with a new card the impact is minute. And rebounds quickly.

Hx is not lost when you close an account if it was a positive account when you closed it.

The TL stays on your report for AT LEAST 10 years if it is positive and MAXIMUM of 7.5 years if it is derogatory.

Doesn't matter what the chronology of events is.

[Anonymous]

I'll believe you since you're FICO focused

Thanks for the clarification.

[Anonymous]

I would keep the card open if it is your only card. If you have others it probably won't matter. After you get your new card that you want, you can do what ever you want with the older card. The canceled card will stay on your report for 10 years.

** However as your credit profile ages this 3 yr old card will age more too if you don't cancel it. The more you can age an open account, the less it hurts when you get more cards later in regards to your score.

Opinion.
Then on the other hand I have seen many people who have canceled a non-prime card for each prime card and have received higher credit lines because some lenders *may* (unconfirmed) look at lower credit lines cards as higher risk (based only on what I have seen). Not sure if I just confused the question.

But my opinion either way is if that is your only card to keep it open at least until you have your other card approved.

[fused]

FICO-Focused is correct!

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=30100