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Hi again everyone. Quick question. If i close down my secured credit card account, will that hurt my credit score? Thanks in advance.
Here's what happens:
I know I'm reviving a 6 month old thread but this is a concern of mine. My oldest card is a Cap1 secured $300 limit over 5 years old. I went on an app spree June 2017 and have 8 other open revolving accounts (not all opened in June, but most recently). So my AAoA is pretty low.
Will closing this account affect me? I am somewhat relying on this cards age for my AAoA, but it still shows on my report so maybe I just answered my own question.
I have it locked anyway and haven't used it in at least a year. I've tried to roll it over to my Cap1 QS card but it says the account is not eligible.
Thanks!
It won't matter for 10 years. When that does not sure how it will play out when as you suggest you may lose 5 years of oldest account age.
That said unless you do something awkward between now and then, you're going to have 10 years of history on your other revolvers which suggests you're going to be just fine scorewise and keeping in mind nothing really underwrites north of a 760 any drop as a result isn't likely going to matter at all.
To illustrate with an example I have an old BOFA secured card that is coming off in 20 months... and it was about 40 months later from that card's close date that I opened up another one. So basically, I gain 20 more months, with some perhaps score increase associated with that... and then I lose 20 months, which puts me right back where I am today.
If the worst that happens is I go back to a roughly 800 score on FICO 8, oh noes!
Anyway you don't want to consolidate you just want to switch that card to something with $0 AF (which *might* be possible now), check on that over on CC's and if you don't get an answer just request that from Capital 1. They might not, but they might, and then you get to keep the tradeline in all it's glory for as long as you can keep it active until they take it away from you... that's how I would play it anyway.
Going along with what Revelate said. The effect in 10 years really will depend upon how many new accounts are opened within the following 10 years. If you open 3 more cards in 9 years and 11 months, you will have a larger drop in you AAoA than if you open 5 cards over the next 5 years.
But, even then it shouldn't have much of an actual score effect as your AAoA would still be quite high in either scenario.
@Kree wrote:Going along with what Revelate said. The effect in 10 years really will depend upon how many new accounts are opened within the following 10 years. If you open 3 more cards in 9 years and 11 months, you will have a larger drop in you AAoA than if you open 5 cards over the next 5 years.
But, even then it shouldn't have much of an actual score effect as your AAoA would still be quite high in either scenario.
Hey Kree. What you say above is a good way of thinking about how the closure would affect AAoA (Average Age of Accounts).
But just for clarity, that's not what Revelate is talking about. He's talking about a factor called Age of Oldest Account. Our friend jlitnns will be closing his oldest card, one that is older than all others by five years. Therefore his AoOA will drop by five years when that closed account leaves his reports.
AoOA (different from AAoA) is one of the factors used in scorecard assignment. If our OP is willing to do a Product Change to a no-annual-fee card (as Revelate mentions) that will allow him to keep that oldest account open.
PS. We can't be sure that the closed card will stay on jlitnns's reports for ten years. Sometimes a closed account is deleted (perhaps by the issuer) way before the ten year mark. (Ask contributor SouthJ for examples from his own experience.) If the closed account were deleted next year, our friend's AoOA would drop from 6 to 1, which is a much bigger deal than 15 to 10. That's one reason I like the suggestion of the product change. Early removals are uncommon but they still can happen.
@Anonymous wrote:
What card is it? How long have you had it? What other cards do you have? Is it your oldest account? Have you tried calling to get it graduated to a non-secured card?
Card is Cap1 Platinum Secured, open for 5yrs 8mos. It is my oldest credit card account. I have installments accounts going back more than 10 years. AAoA is 2.8-3.2yrs between the 3 FICO 8 reports. I have not tried to call and get it graduated.
I have HD, CFU, Chase Amazon, Amazon Store, AMEX BCP, Disc IT, Cap1 QS, Kohls. HD is at 2yrs and the rest 1yr or less.
@Kree wrote:Going along with what Revelate said. The effect in 10 years really will depend upon how many new accounts are opened within the following 10 years. If you open 3 more cards in 9 years and 11 months, you will have a larger drop in you AAoA than if you open 5 cards over the next 5 years.
But, even then it shouldn't have much of an actual score effect as your AAoA would still be quite high in either scenario.
Ok, this makes some sense as well though. And moving forward I'm going to pace myself. This summer's app spree was due to having scores over 700 and trying to get my foot in the door. I went a little overboard.
@Anonymous wrote:
@Kree wrote:Going along with what Revelate said. The effect in 10 years really will depend upon how many new accounts are opened within the following 10 years. If you open 3 more cards in 9 years and 11 months, you will have a larger drop in you AAoA than if you open 5 cards over the next 5 years.
But, even then it shouldn't have much of an actual score effect as your AAoA would still be quite high in either scenario.
Hey Kree. What you say above is a good way of thinking about how the closure would affect AAoA (Average Age of Accounts).
But just for clarity, that's not what Revelate is talking about. He's talking about a factor called Age of Oldest Account. Our friend jlitnns will be closing his oldest card, one that is older than all others by five years. Therefore his AoOA will drop by five years when that closed account leaves his reports.
AoOA (different from AAoA) is one of the factors used in scorecard assignment. If our OP is willing to do a Product Change to a no-annual-fee card (as Revelate mentions) that will allow him to keep that oldest account open.
PS. We can't be sure that the closed card will stay on jlitnns's reports for ten years. Sometimes a closed account is deleted (perhaps by the issuer) way before the ten year mark. (Ask contributor SouthJ for examples from his own experience.) If the closed account were deleted next year, our friend's AoOA would drop from 6 to 1, which is a much bigger deal than 15 to 10. That's one reason I like the suggestion of the product change. Early removals are uncommon but they still can happen.
I really need to put a call into Cap1 and try and PC it so I can keep the age of the account. That is 1st step. If not, I don't see really any reason to close it right? It's not really hurting me keeping it open other than getting my deposit back. Which would be nice, but I don't really NEED it. I did just look up the AF, $29.