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Genuine question about keeping unneeded, no annual fee cards

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Drifter73
Frequent Contributor

Re: Genuine question about keeping unneeded, no annual fee cards

I closed a discover card 1 1/2 years ago but didn't pay attention to scores, aaoa, or other metrics at the time. In 6 months I may be closing another card I no longer have use for and will pay attention to status changes in credit reporting this time.

 

I think what might help with clarity in this discussion thread would be if some people could share their credit stat changes resulting from a closure to give a better idea on why some people try to avoid closures of any kind. Not hear say, 3rd party, or my bro said, but actual experiences from the sources.

 

I know files very and results will be different. But if you get enough different file types reporting in this discussion about score fluctuations that resulted from a closure,  it could at least verify or dispove some myths through the consistency of data.










Message 11 of 45
Brian_Earl_Spilner
Credit Mentor

Re: Genuine question about keeping unneeded, no annual fee cards

We'll, to put it in perspective, to get a perfect score, iirc, you need an 8 year AAoA. Having cards open as long as possible allows you to keep that number up as you open new accounts. In addition, while not widely used, vantagescore 3.0 does not include closed accounts in calculations. Don't remember if it's the same for 4.0.

    
Message 12 of 45
disdreamin
Valued Contributor

Re: Genuine question about keeping unneeded, no annual fee cards

I ditch all cards that aren't useful to me, with the single exception of my very oldest account. That one stays even though I'm not currently putting much spend on it. Its current iteration is a Citi DC card, but it started life as an AT&T credit card with included phone card functionality, which was important pre-mobile phones.

 

Otherwise, every other card heads for the chopping block if it is not a good fit for my spending habits. Admittedly, though, I am someone without the patience to keep high numbers of open accounts. I am most comfortable with 5-6, although right now I am juggling 8 due to co-signing on a card and picking up a new one recently.

Message 13 of 45
Who_wuda_thought
Frequent Contributor

Re: Genuine question about keeping unneeded, no annual fee cards

@Brian_Earl_Spilner 


@Brian_Earl_Spilner wrote:

We'll, to put it in perspective, to get a perfect score, iirc, you need an 8 year AAoA. Having cards open as long as possible allows you to keep that number up as you open new accounts. In addition, while not widely used, vantagescore 3.0 does not include closed accounts in calculations. Don't remember if it's the same for 4.0.

 


I'm kinda wondering how closed accounts are treated on FICO 10 and 10T.  Do you happen to know?

And if closed accounts are in fact disregarded on VS4, more folks need to start paying attention to that since Synchrony uses VS4.  Sync covers a whole lotta credit access, especially for new builders and rebuilders.

 

I don't have any closed accounts, but it would be good to know for future planning purposes.  Eventually 10 & 10T will most likely be the scores prime lenders will be working with.

Scores as of March 6, 2024:




Message 14 of 45
Anonymous
Not applicable

Re: Genuine question about keeping unneeded, no annual fee cards

@cws-21  To be blunt, having a lot of availabile credit is like having a safety net in life. You never know what the future holds, or how hard it might get. You cannot control if tragedy will strike, but you can control your readiness. Having a lot of available credit can ease your mind with the knowledge that you have access to financial means if needed. Furthermore, good credit begets more good credit. So building and upkeep of one's credit is a wise investment. Closing accounts is something I will never do. Not only do they provide peace of mind and security, they also help to build more credit, even passively. Simple upkeep of these accounts is worth every moment of my time.

Message 15 of 45
MrDisco99
Valued Contributor

Re: Genuine question about keeping unneeded, no annual fee cards

Sometimes the bank sends me spend bonus or merchant offers which justify taking the card out of the sock drawer.  I'd miss out on those if I'd cancelled the card.

 

That said, I have closed some cards to help narrow down how many cards/banks I need to keep track of.  Last year I closed my BofA and Synovus cards because I hadn't used those cards in over a year and that would be two fewer banks I needed to check every month.

 

As said above, it's an individual decision, and different people have different tolerance for such things.

Message 16 of 45
longtimelurker
Epic Contributor

Re: Genuine question about keeping unneeded, no annual fee cards

When I first joined, and maybe now, a lot of people were rebuilding or had recently finished rebuilding, and it seems that in that situation each credit card gained was a victory, hence a reluctance to close any card.

 

But that isn't the full story, we have a number of long established members who would never close a card.   Personally I find many of the arguments unconvincing (Does that card with a $300 CL really help you utilization, will that great PC really happen) but others obviously do.

Message 17 of 45
Anonymous
Not applicable

Re: Genuine question about keeping unneeded, no annual fee cards

unless its my oldest cards, if i dont use it, it goes. i have no issue with closing cards. no regrets.

Message 18 of 45
iced
Valued Contributor

Re: Genuine question about keeping unneeded, no annual fee cards


@Anonymous wrote:

@cws-21  To be blunt, having a lot of availabile credit is like having a safety net in life. You never know what the future holds, or how hard it might get. You cannot control if tragedy will strike, but you can control your readiness. Having a lot of available credit can ease your mind with the knowledge that you have access to financial means if needed. Furthermore, good credit begets more good credit. So building and upkeep of one's credit is a wise investment. Closing accounts is something I will never do. Not only do they provide peace of mind and security, they also help to build more credit, even passively. Simple upkeep of these accounts is worth every moment of my time.


Except credit cards are not a safety net, they're a venus fly trap.

 

Credit cards are not assets, should never be considered part of one's cash reserve, and they don't factor into wealth. Someone who relies on them for a tragedy or emergency is trading being able to sleep at night by covering one emergency expense for losing sleep over creditors chasing them for the repayment of that emergency expense and the (often brutal) interest rates that compound the problem.

 

Readiness should be controlled with an emergency fund or savings or some other asset that's actually owned by the individual, not credit and debt.

Message 19 of 45
longtimelurker
Epic Contributor

Re: Genuine question about keeping unneeded, no annual fee cards


@iced wrote:

@Anonymous wrote:

@cws-21  To be blunt, having a lot of availabile credit is like having a safety net in life. You never know what the future holds, or how hard it might get. You cannot control if tragedy will strike, but you can control your readiness. Having a lot of available credit can ease your mind with the knowledge that you have access to financial means if needed. Furthermore, good credit begets more good credit. So building and upkeep of one's credit is a wise investment. Closing accounts is something I will never do. Not only do they provide peace of mind and security, they also help to build more credit, even passively. Simple upkeep of these accounts is worth every moment of my time.


Except credit cards are not a safety net, they're a venus fly trap.

 

Credit cards are not assets, should never be considered part of one's cash reserve, and they don't factor into wealth. Someone who relies on them for a tragedy or emergency is trading being able to sleep at night by covering one emergency expense for losing sleep over creditors chasing them for the repayment of that emergency expense and the (often brutal) interest rates that compound the problem.

 

Readiness should be controlled with an emergency fund or savings or some other asset that's actually owned by the individual, not credit and debt.


Since this often comes up, and I am in the other side, I was trying to think of a situation where have 100x in CL is better than 10x, for largish values if x.  It seems to me it can make sense for an emergency expense that you have no intention of repaying.   Your child is deathly ill, the only hope is a single shot of an experimental drug not covered by any insurance, but it costs 80x.   In that case, and if they were willing to charge several cards, I assume many of us would go ahead and worry about the consequences later.   (Taking some time to post on MyFico "See, never close cards!!!")

Message 20 of 45
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