Question about cancelling subprime cards

[Gotagoal]

After just receiving the approval for AMEX and CCCU - does anyone know if it's going to be a big deal if I cancel my First Premier card which I've had for 2-3 years, only to establish perfect payment history? All has been great, but now that I have these cards on the way, and the annual fee won't hit unitl Dec., I'm thinking I should cancel First Premier and be done with the sub-prime world..... moving foward!!! I'm so excited. Any opinions? Will it hurt my score? One P card I'v'e had a few years - perfect. Another just in May 2007, but I didn't realize I would find this forum to help and end up with an Amex and CCCU, so now I'm wanting to cancel both cards. What do you guys think? Thanks everyone...

[Anonymous]

Your credit score does not just go by how you pay your bills,it also goes by how long you have had them.2 - 3 years is nothing. I would not cancel, you need it for the years

[fused]

This subject is often misunderstood. Here's the skinny. Closing CC accounts does not lower your FICO scores in an of itself. There are other factors particularly util%. That is your available credit (CLs) decreases and your util% increases. Not good. I don't see this as an issue in your situation as most sub-prime starter cards have low CLs to begin with. If you decide to close them just be sure that util remains at 1-9% for max FICO points.So long as the CC has a $0 balance and reports as a postive TL and your util% does not increase there will be no ill effect. Closed or open doesn't matter, what matters is they are postive TLs.

Closed TLs are scored the same way as open ones and carry equal weight. Also, closing a CC will not effect your average age or length of credit history. The only drawback is once the TL is reported as closed it will fall of your reports in 10 years and this can lower your scores.

[Anonymous]

I would keep it open if there are no annual fees on it. It will help your utililzation ratio and the longer your credit history is, the better. You might not see a significant change in your score from closing it now, but 7, 8, 9 years down the road it could help your score keep your score up by being an old account in good standing, especially if you get CLI's along the way and continue paying on time.

[chartley3]

Close it. I just closed two First Premier cards this weekend after paying off the balances owed. I was able to get them to waive the $7 online payment fee on both cards but before I closed them they were unwilling to waive the annual fee and the participation fee. Both my cards had a combined CL of $500 and the new card I have has a CL of 1750. One thing I will caution you on is make sure you have at least 2 major CC open as it seems FICO likes to see that in your profile. I have one more "starter card" I want to close but cant until I can get an approval on a second Juniper card or HSBC.

[smallfry]

If it makes you feel better close out the cards that you have outgrown. As stated by previous posters the TL doesn't die upon closure. Go for it.

[Gotagoal]

Thanks everyone - great tips from all. I think the annual fee (I can't recall the amt), but it's ridiculous with the low CL that First Premier offers, so yep, I just may cancel , enjoy my new cards. The two new cards combined have more CL - so now it will be good to age them with great payment history (I pay off most of the balance each month). I'm just sick of the fees associated with FP. And you're right, if I cancel and it's all paid, a positive TL , I'll be AOK.