Should I accept jcpenney conversion to mastercard?

[Anonymous]

I had the jcpenney department store credit card for about 2 years and never missed a payment. They are now offering me the jcpenney Mastercard which will replace the department store card. The APR will be 27.99% which they said is the APR that all jcpenney card holders get regardless of how good your credit is. The thing is I have 2 credit cards and this jcpenney department store card all of which are in good standing. In fact, I have not missed a single payment on any of the cards and my current credit utilization accross all cards is only 7%. My FICO score is 690. If I accept the jcpenney Mastercard, they will close the current jcpenney department store card and I'm afraid that will impact the credit score. In fact, the offer letter even warned me that closing the old department store card could impact my credit score. Should I accept the Mastercard? Thanks.

[AverageJoesCredit]

Wow, to me this is a unicorn as its a very rare upgrade. Unless they are doing it en mass. The one thing to consider with Synchrony upgrades is it will be a new account, your old card will be closed and your previous history will not carry over. Were it me id take it but if you dont want a new account , this is why it might affect your score, you can decline.

[Anonymous]

Being that JCPenney is another retail relic, I would go ahead and take the upgrade that way if/when they go under you don’t lose the credit line altogether. 

Closing an account only hurts when it falls off which can be up to 10 years after it’s closed. You would take a hit on your AAoA for the new account but that’s a minor setback that is overcome with nothing but time. 

I personally would take it. Synchrony cards can get decent credit lines and having it be a MasterCard obviously makes it a lot more useful. 

[Anonymous]

Thanks for the replies guys.

Saeren, you mentioned that "Closing an account only hurts when it falls off which can be up to 10 years after it’s closed." Are you saying that it only hurts my credit score if the closed account was opened 10 or more years prior to opening the Mastercard account? or did you mean it will continue to affect my credit score upto 10 years after it has been closed?

Also, the JCPenney Mastercard has a 27.99% APR which I think is high compared to my other cards -- 18% for Discover, and 20% for Capitalone. How can it be considered a good card that many people are eager to get?

Thanks.

[Anonymous]

What I meant is that it will continue to contribute to your AAoA and AoOA until it falls off the report which can be up to 10 years. 

The interest rate is high but these cards aren’t meant to have balances carried on them. They are meant to be PIF and often come with deferred interest financing offers. I can’t find anything specific about the MasterCard however it looks like the regular card has them so I can’t imagine they would remove them from the MasterCard. 

Its up to you but considering how little info there is on this card, it’s not an offer many people get. I would look at the terms and see what benefits it might have for you. 

[Anonymous]

Ok thanks. I might end up accepting the offer.

[Anonymous]

I accepted the mastercard and the old account has been closed.

If the closed account continues to contribute to the AAoA and AoOA for 10 years and hence contribute to maintaining a good credit score, then why am I reading online reports of the score dropping upto 20 points right after an old account is closed?

Thanks.

[Hex]

You shouldn’t lose FICO points for closing the card but you will probably lose FICO points for opening the a new account. You will probably lose points on the Vantage model (Credit Karma etc...) for closing the card and for opening a new account but that score doesn’t really matter because that’s not the score most lenders use.

[Anonymous]

You lost points due to AoYA reset, a new account under 12 months. Had nothing to do with the card closing. You'll get points back over a year most likely as long as you don't app for anything else

[SouthJamaica]

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@Anonymous wrote:
I had the jcpenney department store credit card for about 2 years and never missed a payment. They are now offering me the jcpenney Mastercard which will replace the department store card. The APR will be 27.99% which they said is the APR that all jcpenney card holders get regardless of how good your credit is. The thing is I have 2 credit cards and this jcpenney department store card all of which are in good standing. In fact, I have not missed a single payment on any of the cards and my current credit utilization accross all cards is only 7%. My FICO score is 690. If I accept the jcpenney Mastercard, they will close the current jcpenney department store card and I'm afraid that will impact the credit score. In fact, the offer letter even warned me that closing the old department store card could impact my credit score. Should I accept the Mastercard? Thanks.

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As @Anonymous pointed out your credit score will be impacted not by the closing of the old card but by the appearance of a new card. So if you would prefer the new Mastercard to the old store card, and don't mind losing some points on your credit score, then go for it. Otherwise, let it be. There are no doubt better cards out there for you.