When should I close my oldest account?

[Anonymous]

Oldest account: 15 months, will never use this card again - was a great way to get started

2nd Oldest: 12 months, plan to keep this one for life

There's only a 3 month gap between my oldest account, a Visa I was able to get while still living in Canada but which has effectively no rewards and will never be used again, and my 2nd oldest, my amex BCE, which is a keeper.

In the big scheme of things 3 months doesn't impact AAoA much across my 10 accounts. 

However, are there likely significant milestones still to come? Like, oldest account reaches 2 years? Etc?

So at what point can I safely close it?

[Anonymous]

Great question.  Is there any drawback to keeping it open indefinitely?  Do you pay an annual fee on it?

When you close it, it will still be counting as your oldest account until it falls off your reports, which probably won't be for another ten years.  On the other hand, if you kept it open, then ten years from now it would be on your reports for a lot longer, inflating your AAoA as a 10, 11, 12, 13 year old account.

Any decision you make will be fine.

[DU556]

Why not just keep it? As long as they are not charging you an annual fee I don't see why you should. Like the previous post said, 10 years from now it will benefit you more in the long run. Plus your available credit will be higher even if it's just a $500 limit.

[NRB525]

+1 and +1 to the other posters, if no AF cost, lean toward keeping it open.

What bank is this first account from? Are there any product change possibilities to a rewards card?

Keep in mind, any rewards cards are typically limited to 2% on standard purchases, which on a $2 coffee is 4 cents. So you really aren't giving up much by keeping a no AF card open and using it once a month to keep it active.

[Anonymous]

I forgot to ask if it was a store card.  If it is a stpre card (and as the OP says it is also a card he'll never have a use for again) then I'd be more inclined to endorse his decision to cancel.

The reason is that some industries (like the sellers of auto insurance) charge you more if they see multiple store cards on your profile.  So as a long term move I could understand tending to cancel any store cards that the OP has no use for.

[CreditDunce]

Assuming it will not affect your utilization, you can close it now.  It will not make any AAoA difference in the short term.   In 7-10 years when it falls off, your credit file will be a little thinner.  However, since you have gotten all of your credit cards in less than two years, I don't think it will matter.  You will still have over a half dozen anchor cards.  That is plenty for most people.  The exception would be churners.  They need all of the old cards they can get.

From an overall utilization standpoint, closing a 11k line could make a difference.   Looking at your sig, I doubt it will be an issue.  But it is something to verify.

It doesn't look that great to close relatively new credit cards.  But closing one will not raise any eye brows. 

The only other thing I can think of off the top of my head is if you move back to Canada.  It might be nice to have an existing credit line RBC.

If it was me, I would probably just SD the card.  Eventually, they will close the card for non-activity.   The card doesn't have an AF.  Of course, if you are going to be closing other accounts (e.g. checking, savings), it might make sense for the clean sweep.

[Anonymous]

Well, it's a bank card, not a store card, a signature visa with a $10k limit. I have a bank account at the same bank costing me $3/month. It HAD been my primary bank account, but I have recently transitioned everything to BECU after I got a PLOC open there. So I'll keep that bank account for another month or two just to verify there's no payments coming out of it and then my plan had been to close that account down. In that case I'll have to figure out how to get that credit card to autopay from a different institution which seems like it'll be an exercise in mailing forms and calling CSR. So I had been wondering if I should just close it down.

But if there's a credit score boost for hitting some specific oldest account milestones--like 24 months or some such--then it might be worthwhile waiting until my 2nd oldest account has hit those milestones? 

From a utilization perspective the extra $10k limit helps somewhat, but I have recently opened two more cards (Discover, CITI double cash) with $5k and $7k limits, along with a $10k PLOC, so my utilization is improving in any case. Not too worried about losing the $10k.

[SouthJamaica]

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@Anonymous wrote:

Oldest account: 15 months, will never use this card again - was a great way to get started

2nd Oldest: 12 months, plan to keep this one for life

There's only a 3 month gap between my oldest account, a Visa I was able to get while still living in Canada but which has effectively no rewards and will never be used again, and my 2nd oldest, my amex BCE, which is a keeper.

In the big scheme of things 3 months doesn't impact AAoA much across my 10 accounts. 

However, are there likely significant milestones still to come? Like, oldest account reaches 2 years? Etc?

So at what point can I safely close it?

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You shouldn't close it.

[Anonymous]

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@Anonymous wrote:

Well, it's a bank card, not a store card, a signature visa with a $10k limit. I have a bank account at the same bank costing me $3/month. It HAD been my primary bank account, but I have recently transitioned everything to BECU after I got a PLOC open there. So I'll keep that bank account for another month or two just to verify there's no payments coming out of it and then my plan had been to close that account down. In that case I'll have to figure out how to get that credit card to autopay from a different institution which seems like it'll be an exercise in mailing forms and calling CSR. So I had been wondering if I should just close it down.

But if there's a credit score boost for hitting some specific oldest account milestones--like 24 months or some such--then it might be worthwhile waiting until my 2nd oldest account has hit those milestones? 

From a utilization perspective the extra $10k limit helps somewhat, but I have recently opened two more cards (Discover, CITI double cash) with $5k and $7k limits, along with a $10k PLOC, so my utilization is improving in any case. Not too worried about losing the $10k.

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Hi Canadian.  It sounds like you are thinking that, once you close that card, it will stop acting as your oldest account.  That's why you think you might have to wait till your 2nd oldest account has crossed over the 2 year mark before you cancel it.

It's true that, once you close that card, it will stop being your oldest open account.  But there's no evidence that FICO ever distinguishes between open and closed accounts in terms of age.  Quite to the contrary, FICO is very explicit that open and closed accounts count the same in terms of account age, and that both continue to age.

So if you close it next week, it will continue to remain your oldest account for the next ten years.  When it drops off your report, then your "age of oldest account" will drop by three months.  But by then your profile will be 11 years old.

Here's the bottom line:

If you think it will cost you $36/year to keep open, then cancel it.

Or if you think it will be a real headache to manage, after you have closed your back account, then cancel it.

Otherwise you may as well keep it open.

Should you decide to close it for any reason, however, you'll probably be fine.  It's really just up to you.

[NRB525]

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@Anonymous wrote:

Well, it's a bank card, not a store card, a signature visa with a $10k limit. I have a bank account at the same bank costing me $3/month. It HAD been my primary bank account, but I have recently transitioned everything to BECU after I got a PLOC open there. So I'll keep that bank account for another month or two just to verify there's no payments coming out of it and then my plan had been to close that account down. In that case I'll have to figure out how to get that credit card to autopay from a different institution which seems like it'll be an exercise in mailing forms and calling CSR. So I had been wondering if I should just close it down.

But if there's a credit score boost for hitting some specific oldest account milestones--like 24 months or some such--then it might be worthwhile waiting until my 2nd oldest account has hit those milestones? 

From a utilization perspective the extra $10k limit helps somewhat, but I have recently opened two more cards (Discover, CITI double cash) with $5k and $7k limits, along with a $10k PLOC, so my utilization is improving in any case. Not too worried about losing the $10k.

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Which bank?

Modern banks rarely go through manual forms, paper forms, to change autopayment methods. All my banks and credit unions manage autopayment and transfer links to other banks on-line only.

And $10k on a no AF bank credit card is a nice utilization pad, much more than your existing cards.