Credit Card Cancellation Effect Question

[Anonymous]

Hello all,

Before I go into the details the main point of my inquiry is concerning what the effect would be on my credit score if I cancelled my oldest open credit card (and oldest credit establishing item overall) and separately if I cancelled a Synchrony card I had to open when I was in a bind.

Current cards are as follows with the dates being the date opened and the values being the credit limits.

Primary Card Holder:

Credit Union Visa 12/14/2004 $3,000

American Express Blue Rewards 07/21/2006 $33,700

Citi Dividend 06/08/2011 $13,500

Citi Diamond Preferred 06/06/2017 $11,500

Synchrony 06/30/2017 $14,300

Authorized User:

Chase Freedom 10/04/2005 $3,600

Discover Cashback Bonus 05/10/2007 $9,000

My current rotation is the Amex, Citi Dividend, and Discover.  Citi Diamond Preffered was opened for a balance transfer offer. I just applied for the Chase Sapphire Preferred and was approved at a $20k limit which I intend to have replace the Discover in the main rotation.  The Visa through my credit union was my first credit card, however it has a zero balance as it has no rewards of any sort tied to it.  I have left it open for fear it will adversly effect my score if closed.  It is a similar situation with the Chase Freedom based on its low credit limit, but applies to my wife as her longest open card. Can someone provide insight into how to best handle this situation?

Also, we had an emergency home repair situation and opened the Synchrony card to pay for it at the time which was then subsequently paid off via other means.  I would like to possibly cancel that as well and am looking for insights on its potential impacts.

I have several revolving accounts as well that round out my profile. For reference my scores that I know of are below.  Thank you all in advance! 

Current scores:

Experian Score:  786

Experian Score 8 via American Express: 813

Equifax Score via Citi: 829

[Anonymous]

Closing either account today would have zero impact on your score today.  Around 10 years from now, those accounts if closed today will fall off of your credit report.  The question then is whether or not those accounts falling off would have a major adverse impact to your age of accounts factors (AoOA and AAoA). 

You just opened the Synchrony account last year, so I see no issue with closing it.  If you feel you may need it again at some point, just SD it and give it a small swipe every 6 months or so at a Rite Aid or a vet's office to keep it alive.

I'd advise against closing your credit union card, even if you don't use it.  Your AoOA is 13.5 years or so today because of that account and you don't want that 23.5 year old account falling off 10 years from now if you can help it.  And you can help it, simply by keeping it open and giving it a tiny swipe every 6 months or so to keep it from being closed.  I would do everything you can to keep it open and if I were you wouldn't even consider closing it.

[SouthJamaica]

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@Anonymous wrote:

Hello all,

Before I go into the details the main point of my inquiry is concerning what the effect would be on my credit score if I cancelled my oldest open credit card (and oldest credit establishing item overall) and separately if I cancelled a Synchrony card I had to open when I was in a bind.

Current cards are as follows with the dates being the date opened and the values being the credit limits.

Primary Card Holder:

Credit Union Visa 12/14/2004 $3,000

American Express Blue Rewards 07/21/2006 $33,700

Citi Dividend 06/08/2011 $13,500

Citi Diamond Preferred 06/06/2017 $11,500

Synchrony 06/30/2017 $14,300

Authorized User:

Chase Freedom 10/04/2005 $3,600

Discover Cashback Bonus 05/10/2007 $9,000

My current rotation is the Amex, Citi Dividend, and Discover.  Citi Diamond Preffered was opened for a balance transfer offer. I just applied for the Chase Sapphire Preferred and was approved at a $20k limit which I intend to have replace the Discover in the main rotation.  The Visa through my credit union was my first credit card, however it has a zero balance as it has no rewards of any sort tied to it.  I have left it open for fear it will adversly effect my score if closed.  It is a similar situation with the Chase Freedom based on its low credit limit, but applies to my wife as her longest open card. Can someone provide insight into how to best handle this situation?

Also, we had an emergency home repair situation and opened the Synchrony card to pay for it at the time which was then subsequently paid off via other means.  I would like to possibly cancel that as well and am looking for insights on its potential impacts.

I have several revolving accounts as well that round out my profile. For reference my scores that I know of are below.  Thank you all in advance! 

Current scores:

Experian Score:  786

Experian Score 8 via American Express: 813

Equifax Score via Citi: 829

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1. Closing any card could affect your score if it increases your utilization percentage by decreasing the denominator. If your utilization is very low there would probably be no utilization effect.

2.  Closing your oldest card would affect your score, possibly significantly, but only when the card drops off of one or more reports, which could be many years down the road.

3.  If I had a credit union card, with no annual fee, as my oldest card, I would never ever close it or allow it to be closed for inactivity. If you want more rewards, you could ask your credit union if you can PC the card to a rewards card. Non-rewards cards issued by credit unions can be useful too. Often they come with (a) no balance transfer fee, (b) no cash advance fee, and (c) low interest, making it possible to use them for things you would never use a regular credit card for.

4. The Synchrony card you can dump whenever you want, so long as it doesn't hurt your utilization, but even here I would probably sock drawer it, or give it occasional use, rather than close it.

[HeavenOhio]

Good responses above. There should be no problem closing the Synchrony account, but do keep your oldest card open.

I'll add that while three open cards are known to optimize one's score, some say five is better. For that reason, I wouldn't drop below five cards unless one of them causes problems. Because you have a replacement in hand and will still have five open cards, you're set there.

[Anonymous]

Thank you all for the information and taking the time to reply.  I was always under the impression that leaving that credit union Visa open was my best move and having you all confirm is comforting.  One important point I did not often consider was making periodic purchases on those "dormant" cards so they don't get shut down by the provider.  I'll be sure to do that going forward. Thanks again!

[Anonymous]

Great responses by the other folks.  While I agree 100% with their advice to keep the oldest card open, it's worth observing that the second oldest open card is also old and only a bit younger.  So the impact in ten years (if the CU card fell off) won't be that pronounced.  It would be a far more serious concern if, when the CU account fell off, it caused your AGe of Oldest to drop by a huge amount.  For example...

CU account opened 20 years ago

All other card opened in the last year.

OK to close the CU card?

Here the answer would be Absolutely Not.  Because ten years from now, the owner's Age of Oldest Account would drop from 30 to 10. 

It's not nearly that extreme for our OP.

Still, if our OP were to close the CU card, then he would have only one old card remaining.  And if that got closed (due to the bank going into bankruptcy, or due to inactivity, etc.) then he'd have no old cards.  I like having at least two old cards just for safety.

[AndySoCal]

If it were me I would close the Synchrony due it would have the least affect on the average of accounts.  I would give that card a small transaction once every so often to avoid the possibility of it being closed due to inactivity. The other affect would the on your credit utilization.

[Anonymous]

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@AndySoCal

If it were me I would close the Synchrony due it would have the least affect on the average of accounts. 

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What do you mean by "average of accounts?"  If you're referring to average age of accounts, closing an account has no impact on that at all, although some front-end fluff software from sources such as Credit Karma would have some believing otherwise.