Closing authorized user account - will it hurt my credit?

[Schmoopy]

Hey,

I started building my credit recenlty (average credit age is 1Y4M) and my first card was a secured Wells Fargo card.

After that I issued a card as an authorized user for someone else's Amex gold card.

I made all payments on time and Amex approved me for my own Gold Amex later on (pre approved spedning limit is $50K).

Amex raised the annual fee from $95 to $195 so I'm thinking to close the card as an authorized user - so I don't pay $195 twice.

Will it hurt my credit in any way?

It's a charge card with no credit limit just a pre-approved spedning limit. It has $70K limit on it. So I assume closing it won't affect the credit limit or utilization %. Will it affect anything else?

I thought it was ok to keep for $95 for the potential spending but now that my card has $50K I don't think I'll need more than that.. thoughts? Thanks

[Anonymous]

No it will not negatively affect your profile if you drop the AU, since Amex no longer backdates, your profile probably took a new account/AoYA resetting hit when you first added it.

[Schmoopy]

Ok, good to know. thanks.

What is "Amex no longer backdates"? What does that mean?

BTW - isn't adding an AU increase your credit? I thought it does, at least it increased mine (in this case and with BofA cards I was added as AU).

Thanks

[Anonymous]

One of the biggest reasons to be added as an AU is the age of the account to help boost your own AAoA (average age of accounts) and AoOA (age of oldest account), Amex is one of the few lenders that does not backdate (adopt the age of the account) so the account is reported to your profile as a brand new account with an age of 0 months, this ends up defeating the purpose of AU and actually drags down your AAoA and resets your AoYA (age of youngest account) to 0. This is why one should choose lenders other than Amex when it comes to AUs.

[Schmoopy]

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@Anonymous wrote:
One of the biggest reason to be added as an AU is the age of the account to help boost your own AAoA (average age of accounts) and AoOA (age of oldest account), Amex is one of the few lenders that does not backdate (adopt the age of the account) so the account is reported to your profile as a brand new account with an age of 0 months, this ends up defeating the purpose of AU and actually drags down your AAoA and resets your AoYA (age of youngest account) to 0. This is why one should choose lenders other than Amex when it comes to AUs.

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Got it! Interesting. Good to know. And dropping it, it is

[FlaDude]

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@Anonymous wrote:
This is why one should choose lenders other than Amex when it comes to AUs.

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I didn't realize that, I added my daughter to my Blue account as an AU a couple of months ago and see exactly that when I check on CK. OTOH, she is an AU on my Gold account and it shows the opening date of 1994, which is when I opened the account. I don't remember exactly when I added her to that, probably around 8-10 years ago. Maybe they used to handle it differently.

Since the Blue account has a 32k limit with 1% utilization (soon to be PIF) it is probably still something I would do even knowing this. Between adding the Blue and removing her as an AU from another account that was close to maxed her FICO jumped 30 points and Vantage close to 50. Her only card has a 4k limit and around 70% util.

[Anonymous]

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@FlaDude wrote:

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@Anonymous wrote:
This is why one should choose lenders other than Amex when it comes to AUs.

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I didn't realize that, I added my daughter to my Blue account as an AU a couple of months ago and see exactly that when I check on CK. OTOH, she is an AU on my Gold account and it shows the opening date of 1994, which is when I opened the account. I don't remember exactly when I added her to that, probably around 8-10 years ago. Maybe they used to handle it differently.

Since the Blue account has a 32k limit with 1% utilization (soon to be PIF) it is probably still something I would do even knowing this. Between adding the Blue and removing her as an AU from another account that was close to maxed her FICO jumped 30 points and Vantage close to 50. Her only card has a 4k limit and around 70% util.

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Amex used to backdate, I don't know exactly when they stopped but it's probably after you added her on the Gold Card. Large limit to help with UTI like in your case is another reason for AUs, for OP though, the card is a charge card so it does nothing for UTI.

[FlaDude]

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@Anonymous Amex used to backdate, I don't know exactly when they stopped but it's probably after you added her on the Gold Card. Large limit to help with UTI like in your case is another reason for AUs, for OP though, the card is a charge card so it does nothing for UTI.

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Could charge cards be detrimental to UTI since they show zero CL but the balances are added to the credit card balances?

[Anonymous]

No, charge cards do not factor into your UTI calculations, even for primary card holder.

[FlaDude]

Thanks, good to know.