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Closing oldest CC

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Closing oldest CC

I have had a Costco AMEX for 10yrs, Prime + 9.9%. Currently 36.2K credit limit, zero balance. I also have a Capital One Prestige MC, 7.9%, 5K limit, zero balance.... Bank of West MC, Prime + 5.15%, 4k limit, zero balance.  The 2 MasterCards I have had 7 months, 3 years respectively. My problem is that I no longer need or want the AMEX. I rarely shop at Costco and AMEX has the highest interest rate of the 3 credit cards I have. I have numerous closed credit card accounts showing on my credit reports going back many years, no negatives and FICOs around 800, Vantage Score of 905. I think the large AMEX credit line is holding me back from getting higher credit limits on my other 2 credit cards that have with better terms. When I got the AMEX card 10 years ago, I had a higher household income (60K). I considering buying a car this year and would finance it.....Probably a used car though. A potential lender may be concerned about all the available credit I have vs current income (45K). Do you think my score would take much of a hit if I closed AMEX ?  I currently have zero debt. (first time in 11 years)
Message Edited by tikkasf on 03-26-2009 11:25 AM
Message 1 of 4
Established Contributor

Re: Closing oldest CC

I wouldn't close it since it's you're oldest credit card. It doesn't really cost you anything to keep it open. I believe the Costco AMEX doesn't have any AF's and the interest rate wouldn't matter as long as you paid off the balance before you statement closed.
Message 2 of 4
Established Contributor

Re: Closing oldest CC

Also, make sure you use it for a small purchase every month to keep the account active. They can and will close an inactive account in as little as 3 months.
Message 3 of 4
Senior Contributor

Re: Closing oldest CC

Unless your AMEX carries some type of hefty Annual Fee, do not close it.  And if you don't carry a balance on it, then it really doesn't matte what the APR is, moot point.


While closing the account will not remove the account from your AAoA calculations, it will still potentially impact you none for the better.


Also, the credit limit helps limit your percentage of utilization when you do use your other cards.  Just use the AMEX occassionally (it's good at more places than Costco) and PIF each month so you have no interest.


If you feel the AMEX CL is hurting you (I doubt it, but possibly) then ask AMEX to reduce the CL to say $10K.  Then you don't have the large CL, you keep your oldest account open, it will still help your overall utilization and is available should you have use down the road.


FYI:  Having established higher CL lines of credit makes other creditors more likely to grant higher credit.  Nobody wants to go first.  Some high end Visa/MC cards require you to have an existing account which exceeds a certain limit as part of the qualification.  You could have high enough FICO and income, but fail because existing credit is not enough to establish the higher levels. 


You must show your ability to manage high CL before creditors want to grant it.  Right now many lenders are just not giving the higher CL due to necessity, not necessarily because AMEX is high for you.  In fact, many AMEX holders have had CLD extensively, even those with long standing perfect history.  So, your AMEX actually may be a badge of honor!


ABOUT YOUR CAR LOAN:  You will have ZERO problem getting a new or used car loan with 800 FICO and the length of established credit.  $45k is less income, but you have less debt also, right?  And the fact that you are buying used and acting conservatively shows financial discretion.

Message Edited by txjohn on 03-26-2009 01:46 PM

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
Message 4 of 4