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Bad to cancel first Credit Card?

B

bjc112

Lifer
Not sure if this is true or not, but I heard it is beneficial to never close out your first credit card as it can affect your credit score in a negative way.

I am 22 and have awesome credit and I am wondering if I should just leave it open, just because?

Input is awesome!
 
Definitely leave it open. The average age of your credit cards plays a pretty big role in determining your credit score - the older, the better. There are a few other reasons to leave it open as well.
 
Originally posted by: JasonE4
Definitely leave it open. The average age of your credit cards plays a pretty big role in determining your credit score - the older, the better. There are a few other reasons to leave it open as well.
Click to expand...

/thread.
 
Doesnt affect the debt to income ratio?

Or is that not a major factor since I really dont have any "bad" debt. (Not considering my house and such )
 
Originally posted by: bjc112
Not sure if this is true or not, but I heard it is beneficial to never close out your first credit card as it can affect your credit score in a negative way.

I am 22 and have awesome credit and I am wondering if I should just leave it open, just because?

Input is awesome!
Click to expand...


Closing old accounts can hurt your score in several ways.

Primary among them is that closing a revolving line of credit effectively increases your total debt usage percentage-- which is bad for your credit.

Also, one small factor in your credit score is the average age of your open accounts. Closing an old account lowers this value.

Unless you are paying a monthly or annual maintenance fee, I certainly wouldn't cancel the card. In fact, I would make it a point to use it from time to time to make sure the creditor doesn't close it for you...


 
I think closing out your first credit card will reduce the length of your credit history, ths affecting the score... I might be wrong....
 
Does this apply to a credit line at a bank as well? I got mine when I was 18 years old, no plans on closing it now but I'm wondering if I should plan on always having it.

edit: I mean a credit line on a checking account, like an overdraft limit.
 
You guys are clueless... I open/close credit cards all the time and my credit score is 820+ Got my first card in '89. Longest one I've got now is MAYBE 5 years. Just pay your bills on time and you'll be fine. Length of your credit history takes into account all the cards you've ever had, not just what you have open now.
 
Originally posted by: MoobyTheGoldenCalf
You guys are clueless... I open/close credit cards all the time and my credit score is 820+ Got my first card in '89. Longest one I've got now is MAYBE 5 years. Just pay your bills on time and you'll be fine. Length of your credit history takes into account all the cards you've ever had, not just what you have open now.
Click to expand...

So you're what...mid-30's? The odds of you having an 800+ FICO and being that young are extremely unlikely. It takes more than 18 years to build up a history to get an 800+ FICO...typically the only ones I used to see w scores that high were people in their late 50's and older. It doesn't really matter anyways, once you get past the mid 700's or so it's more or less all top tier.
 
The points are valid for relatively new credit. If you want to diversify or branch into other forms of credit (LOCs) for example, closing up old cards would free up available credit to you to open the account.
 
I cancel my cc all the time... usually carry 2-3.. till one of these people piss me off.. have no problem getting new one..

latest cancel : chase amazon - had for 4 years
latest new card: bank of america's Hello Kitty pink one.. great for picking up chics !
 
Originally posted by: SoulAssassin
Originally posted by: MoobyTheGoldenCalf
You guys are clueless... I open/close credit cards all the time and my credit score is 820+ Got my first card in '89. Longest one I've got now is MAYBE 5 years. Just pay your bills on time and you'll be fine. Length of your credit history takes into account all the cards you've ever had, not just what you have open now.
Click to expand...

It takes more than 18 years to build up a history to get an 800+ FICO...
Click to expand...

My FICO score as provided by TransUnion is 821; I'm 27.

Edit: That translates to about 10 years of credit history for me.
 
Originally posted by: amdforever2
There is never a good reason to close a credit card that has no annual fee.

Not one, not ever.
Click to expand...

Sure there is. Companies like Citibank only let you have 3 cards with them. Also if the credit card is relatively new to you, it can bring down your average age of accounts. Sometimes they let you roll lines of credit from one card to another. And other times, you just don't want to have to worry about having another card..personally I like having 5 or so myself, but I only carry 2. Anymore than that can get unwiedly. And my credit is excellent as well.
 
Originally posted by: SoulAssassin
Originally posted by: MoobyTheGoldenCalf
You guys are clueless... I open/close credit cards all the time and my credit score is 820+ Got my first card in '89. Longest one I've got now is MAYBE 5 years. Just pay your bills on time and you'll be fine. Length of your credit history takes into account all the cards you've ever had, not just what you have open now.
Click to expand...

So you're what...mid-30's? The odds of you having an 800+ FICO and being that young are extremely unlikely. It takes more than 18 years to build up a history to get an 800+ FICO...typically the only ones I used to see w scores that high were people in their late 50's and older. It doesn't really matter anyways, once you get past the mid 700's or so it's more or less all top tier.
Click to expand...


I'm 34. I've had an 800+ FICO score for at least the last 4 years. I make 70K and have never paid a bill late in my life.
 
Originally posted by: erub
Originally posted by: amdforever2
There is never a good reason to close a credit card that has no annual fee.

Not one, not ever.
Click to expand...

Sure there is. Companies like Citibank only let you have 3 cards with them. Also if the credit card is relatively new to you, it can bring down your average age of accounts. Sometimes they let you roll lines of credit from one card to another. And other times, you just don't want to have to worry about having another card..personally I like having 5 or so myself, but I only carry 2. Anymore than that can get unwiedly. And my credit is excellent as well.
Click to expand...

Another reason I cancel and get new cards is for 0% APR offers. Right now, I've got 2 Chase 0% cards. One is up in July, one is up in Dec. I've got the money to pay both of them off sitting at Emigrant Direct earning me 5.05% until then. Once the APR offers expire, I'll pay off the cards, cancel them and find some new 0% offer somewhere else. Rinse and repeat. I've also got a Amex Blue I've had for a while and an HSBC with 6.9% fixed just in case.

 
Originally posted by: MoobyTheGoldenCalf
You guys are clueless... I open/close credit cards all the time and my credit score is 820+ Got my first card in '89. Longest one I've got now is MAYBE 5 years. Just pay your bills on time and you'll be fine. Length of your credit history takes into account all the cards you've ever had, not just what you have open now.
Click to expand...

and if you didn't do that, maybe your score would be 830.
 
Erub, I work for Citibank.

You're wrong.

As for Mooby,

The age of an account when it's closed becomes it's final age as factored for average age of accounts.


Twenty accounts murdered after their first birthday followed by tons of inquiries to reopen new accounts over and over at zero percent is not good policy.
 
Originally posted by: coaster831
My FICO score as provided by TransUnion is 821; I'm 27.

Edit: That translates to about 10 years of credit history for me.
Click to expand...
If you got that score directly from TransUnion, it is NOT your FICO score. Your actual FICO score could be in the 800's or it could be much lower. That fake score from TU is relatively meaningless.

On the topic, yes, cancelling your oldest account will almost certainly cause your FICO score to drop. Whether or not the amount of the drop is enough to be worried about depends on what your score is and what the rest of your credit report looks like. In general, keeping older established accounts with good history open is a good idea. But that doesn't mean you should never close accounts.
 
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