@Anonymous wrote:
I have never really understood the "close it" mentality. When all these accounts that get closed fall off your credit report in 10 years, you will have a major dip in your average age of accounts. Sure it may not seem like a big deal now, but when your AAoA goes from say 10-20 years to say 5 years, you will probably kick yourself for closing "unneeded" accounts.
That's really not a concern if you've replaced them with other card accounts that you utilize regularly. You could only really get in trouble if you're cycling accounts every single year with no anchors to stretch the average.
@kdm31091 wrote:I am in the "close if no longer useful" camp. The utilization thing is way, way overblown around here. It sure is!
Yes, if you have 2 cards with 10k limits and you close one, your utilization will suffer, but if they both have zero balances, it's unclear how much your score will actually change (low util is still low util).
I can say that I've always closed cards that were useless to me and I've never seen a score drop from it whatsoever. As long as you have a few cards with moderate limits, and their util is low, you are not going to see a huge drop and likely may see absolutely no change!
The reverse has also been true for me. My Amex CLI, my QS CLIs over time, etc....they've never increased my score despite the frequent "util buffer" arguments. Sure, it's nice to have the bigger limits of course, but my score didn't suddenly shoot up because my util had been lowered, since it was already low.
The point is if your util is already low it's already low and closing worthless cards is unlikely to matter.
As for AAOA, you have an entire 10 years from the time of closing the card before it disappears. During that time, first of all your existing cards have aged ten years as well and second of all, who really knows what scoring models will care about 10 years from now? AAOA may be even less important than it is now. I will say again that despite my AAOA being dinged from new accounts, I rarely saw a score drop because of it, and if I did it was maybe 2-3 points. Since your AAOA isn't going to change immediately from the closure, I would say the eventual dip is going to be so minimal you won't even notice it. I agree with this and to go along with this if you do notice a "drop" it could be from something else entirely at that time.
Just close them if they're useless to you is the point.
Great post here. Same thing for me. My QS just went from $6.5K to $11.5K and my score didn't change at all because prior to the increase my utilization was 1%. Now that my card nearly doubled my utilization was still at 1%, so no score increase. I also increased my Barclay Rewards and nothing. I didn't expect anything either because the utilization was already extremely low.
I say close the cards. It's just a few other accounts that you have dangling over your head that you could possibly forget about and miss a payment or something, and then that's when your CS takes a hit. Where as you close them now you don't have to worry about that.
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