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CLOSING CREDIT CARDS

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CLOSING CREDIT CARDS

I know closing credit cards has a negative impact on your credit score, but is it really bad?  How long does it take to recover from closing credit cards?  How much does your credit score go down?  I have about 3-4 credit cards that don't get used and I know that not using credit cards hurts your credit score as well.  Any advice?

Message 1 of 5
4 REPLIES 4
Contributor

Re: CLOSING CREDIT CARDS

Why close them as long as you don't have a annual fee no need to close them it will only help your Utilzation. Keep them open IMO,

Gardening 10/10/14 to 10/10/15



Message 2 of 5
Moderator Emeritus

Re: CLOSING CREDIT CARDS


@friscojoe wrote:

I know closing credit cards has a negative impact on your credit score, but is it really bad?  How long does it take to recover from closing credit cards?  How much does your credit score go down?  I have about 3-4 credit cards that don't get used and I know that not using credit cards hurts your credit score as well.  Any advice?


There are many misconceptions on the subject.

 

Here is an excellent discussion about Closing Credit Cards.

Message 3 of 5
Super Contributor

Re: CLOSING CREDIT CARDS

What are the cards you have open, and what are the cards you propose to close?

What are the CL on each?

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 4 of 5
Senior Contributor

Re: CLOSING CREDIT CARDS


@friscojoe wrote:

I know closing credit cards has a negative impact on your credit score, but is it really bad?  How long does it take to recover from closing credit cards?  How much does your credit score go down?


As with just about anything credit-related it depends on one's credit.  There isn't a fixed impact for closing a card nor is there a fixed timeframe for recovery or a fixed number of points.  Take a look at the link provided in a former post as it covers the impact of closing a credit card.  Do the math to calculate utilization before and after to help you in your decision making.

 


@friscojoe wrote:

I have about 3-4 credit cards that don't get used and I know that not using credit cards hurts your credit score as well.  Any advice?


It sounds like you're relying on some oversimplifications.  Not using doesn't necessarily hurt.  Usual factors are:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

General recommendation is for optimal scoring to only have only balance reporting at 10% or less so it helps to have cards not reporting balances from that perspective.  Where you might run into an unwanted effect of not using a card is closure due to inactivity but you'd have to confirm with each creditor to determine the relevant policy.

 


@frank98284 wrote:

Why close them as long as you don't have a annual fee no need to close them it will only help your Utilzation.


While that's a populay apporach at myFICO it's not one-size-fits-all.  Not everyone chooses to keep all no-AF cards open.  Impact to utilization is going to vary depending on the card and the OP's other balances and limits.

 

 

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