How much does closing a credit card really hurt your credit?

[BigToque]

I've got two credit cards ($11,000 and $5,000) with a $0 balance and I never use the $11,000 card.

I was thinking of closing the account, but I keep hearing that it's better to keep it open... (I've had the card for about 6 years now).

 

[bctbct]

There is really no set answer. Given that it has your largest credit line I would speculate... a lot.

No reason to close it, in fact its a good time to use it so they dont close it.

 

[Bignate603]

Why close it? It's not costing you anything.

 

[txrandom]

It will presumably increase your average credit utilization and lower your average credit history length. Both of those can decrease your score.

 

[Spook]

Don't worry give it a few months, and they will do it for you... keep it open, and just see how much they trim off the top at this point, don't do it preemptively

Credit Cards May Pull Back $2 Trillion in Lending

 

[blurredvision]

I recently had one of my credit cards canceled for me because I didn't use it. However, I didn't mind, because it had an abnormally high interest rate, and I would've NEVER used it otherwise. I would rather go hungry than pay what interest they wanted. I requested a rate decrease, they declined, so I moved it all to another credit card.

 

[Bateluer]

Originally posted by: Spook
Don't worry give it a few months, and they will do it for you... keep it open, and just see how much they trim off the top at this point, don't do it preemptively

Credit Cards May Pull Back $2 Trillion in Lending

I recall reading something related to this, where lenders were reducing the credit limits on cards with balances, sometimes bringing them into over limit status and then hitting the owner with the applicable fines and rate hikes.

 

[aircooled]

Use it for a tank of gas once a month and keep building your credit.

 

[StageLeft]

Originally posted by: Bateluer

Originally posted by: Spook
Don't worry give it a few months, and they will do it for you... keep it open, and just see how much they trim off the top at this point, don't do it preemptively

Credit Cards May Pull Back $2 Trillion in Lending

I recall reading something related to this, where lenders were reducing the credit limits on cards with balances, sometimes bringing them into over limit status and then hitting the owner with the applicable fines and rate hikes.

I bet that's simply not true. I'm sure they would lower it close to the limit, but no lender is going to bring it below the limit and then call it overdraft. CCs are evil but not 1st mates to Satan's ship.

Many citi card customers, myself included, have seen unusually attacks on what used to be low APR cards for seemingly no reason. I think it's a good idea to keep unused cards open and just use them every few months (which is what I'm now going to do with my citi card) and not close them.

 

[Turin39789]

Originally posted by: txrandom
It will presumably increase your average credit utilization and lower your average credit history length. Both of those can decrease your score.

This. I have two cards with citi and I just found out they are not reporting the credit limits to the CRA because they will allow you to go over the limit on them. So I had a total of 11k(12,500 after a recent unsolicited increase) of my credit limit not showing and hurting my utilization.

Called last night and changed one of the cards to a different type, they still wont report the other one, they were my airline cards so I'll get a replacement and then switch it over too.

 

[Sho'Nuff]

Depends on how many credit cards you have. If you have a lot of unused cards, closing a few can help your score. If you have a few, closing one or more of them can harm your score.

I've been told by numerous financial advisors that I should close ~50% of the cards I have, because I have too many outstanding (though unused) credit card accounts. When I had no money ~ 15 years ago, I would fill out credit card apps to get a free gift (usually a t-shirt or umbrella or something). I never used the cards. I would just chop em up when they were sent to me in the mail and never did anything about the accounts. Right now I think I have something on the order of 50-60 credit card accounts. Though like I said, I never use any of them.

 

[xgsound]

Originally posted by: txrandom
It will presumably increase your average credit utilization and lower your average credit history length. Both of those can decrease your score.

This sounds right if those are your only two cards. You would be throwing away a good 6 year history with the 11,000 card and making it look like you use more of your available credit. If you keep the card that has you using 33% or less of your available credit. Who would you rather loan to?


Jim

 

[looker001]

Never found the answer on exactly how credit score system works but from my understanding they take number of years you had the card, your debt ratio(available credit and your debt)...so it might have big impact on your credit score or it might have little, i think only the comptuer that calculate the score knows for sure.