Credit Card Holders Question Closing Practices
14 posts in the last 30 days, all from r/CreditCards.
“I have the no annual fee Credit One American Express version. It was one of my first credit cards. I never had a problem with it. It's definitely a sock drawer card. I only use it two or three times a year just to keep it open. You made the correct decision of canceling though…”
“You are correct. It’s not a problem to let them close or to close them yourself. Just keep at least one card active.”
“It's a huge myth that you shouldn't close cards. As long as it's not your only open card, there is nothing inherent in the closure of a credit card that will cause a FICO score to drop. Closing a credit card doesn't hurt your credit age, even if it's your oldest card. That's…”
Users are debating the merits of closing credit cards, with discussions revolving around potential downsides like missed payments and perceived myths. There's confusion and disagreement regarding the impact on credit scores and overall financial health.
SOURCES (60)
“It's a huge myth that you shouldn't close cards. As long as it's not your only open card, there is nothing inherent in the closure of a credit card that will cause a FICO score to drop. Closing a credit card doesn't hurt your credit…”
“Their comment was full of bad information and credit myths. See the reply by u/BrutalBodyShots , he's giving good information here. [re: Will it hurt my credit if I close a credit card I just paid off?]”
“Why bother closing anything that has no AF? Just lock it and put it in the ol' sock drawer. As for the cards with fees, do you organically use it enough to break even on the fee? If not, close or downgrade it. [re: Too many credit cards? Which ones should I close?]”
“I want to know something. I opened about 2 cards recently and I want to close one of them(new card 2). One, because it was on impulse... Two, because looking into the bank I see a lot of negative opinions. Will closing the card affect my credit utilization for the following year or only for a month? How much of an impact will it have? Oldest card : 3.7k Newer card : 3k New card 1 : 2k (about) New card 2 (Synchro): 1.3k I will try to answer any question you have that you need to help me answer th”
“Yes, it's standard for cards to be closed for non use after a length of time. As for what that length of time equates to, that depends on the issuer and the profile in question. [re: Got a letter from one of my cards closing account]”
Just let it sit. Cards don’t close from inactivity quickly.
“Opening causes an impact, and not closing it. They could take rescind both SUBs + blacklist you. Monitor the accounts and close it on day 366. There are basically no upsides, just downsides in closing it within a year.”
“No. You never said. You just implied, since you started a Reddit thread about it. You can highly doubt what I said, and you can highly what they said. Doesn't matter. Although, I can tell you, when the reason is inactivity, they usually give you a heads-up and an opportunity to use the card if you want to keep it. So it's not that. If you already have your own opinion, and you don't even care that much, why start the thread?”
“No, I’d just sock drawer the hell out of it until they canceled it — assuming there was no annual fee. Otherwise yeah, I’m canceling after 12 months.”
“losing the gold doesn't really hurt your credit age for like 10 years anyway, closed accounts in good standing keep aging on your report. definitely open a no-fee mr card first though, otherwise all those points just vanish into the void”
“You linked nonsense you probably made up. No need to read it. All the card companies say they dont like it. All the card forums are full of people whos accounts were closed because they do it. Your inability to accept the truth doesn't mean I need to gather a bunch of easy to find and not made up data points. But you keep cycling that CreditOne "Amex" card lol.”
“Lmao read the rest of the comments. OP is calling anyone who gives them a reality check and telling them the facts negative just because it's not what they wanted to hear”
“Yeah it's not illegal but banks aren't obligated to do business with a customer who follows that behavior. I don't blame you for trying though”
“Gotcha thanks. Not currently an Amex customer and def don’t plan on doing gift cards once I become one was just curious from other comments I’ve came across”
“I have the no annual fee Credit One American Express version. It was one of my first credit cards. I never had a problem with it. It's definitely a sock drawer card. I only use it two or three times a year just to keep it open. You made the correct decision of canceling though. I haven't canceled mine only because it's a no annual fee card.”
“If it wasn’t charge card but a regular one, and if they had a debt on other CCs, then it would def affect their utilization and so the score. Not something to worry about but still.”
“Sure, theoretically it will make your credit utilization higher, but that only matters if you’re applying for more credit. Utilization has no memory. You can fix it next month. For a charge card like the Amex Gold, it doesn’t count towards your utilization anyway. Closing a card by itself does not lower your credit score.”
“Jesus. I have 15 I think and I'm thinking of closing at least 10 of them because I don't use them anymore”
“Will mission lane ever cut a deal to close an open card and give you a lesser payoff ? submitted by /u/Snoo_37752 [link] [comments]”
“I have been closing predatory cards as they are paid off. I have significantly better cards now. No need to keep the ones that have fees”
“Closing the account will drop your credit score. If you can be trusted not to run up a balance, don't close. Keep in mind with any balance transfer - you should not use the card once you do a balance transfer. New purchases will (generally) get charged a higher interest rate. I wuld definitely transfer what you can from the 3k card to the 9k card.”
“My bad if I read into your post wrong. Yes I totally agree that everyday people do use their cards for those type of purchases and yes they do not default or at least they try not to. But to use 8 different credit cards is a liability risk and a red flag telling the creditors this person is more of a risk than the average person using their cards just to get by in the everyday world.”
“IDK how you got I'm looking down on anyone from my two sentences, but whatever. My point is the vast majority of cc spend is on things like groceries, Amazon or fast food. And the vast majority of people do not default.”
“Dont close it, just cut up the card. Closing it is really not going to stop you because if you don’t have self control, you’ll just apply for a new one and they’ll overnight it to you. Trust me Ive been there.”
“I mean I was wondering how it works, obv if your score is over 800 you don’t need to worry about it”
“Please be respectful in your responses. I am just spitting a random take here. I am by no means an expert on credit, interest, or credit cards. I learn as I go. If you any information to teach me more, please do so, but do so kindly.”
“Credit cards will never be killed off. American economic policy loves debt, and that is pervasive into our culture. At this point it’s in our blood to buy stuff we can’t afford.”
“The CSR at the bank won't be able to tell you that, they don't understand the scoring algorithms any better than your average person. They'll most likely regurgitate commonly spread misinformation about credit scoring. However, the regulars over at r/CRedit and r/CreditScore (myself included) have studied these algorithms extensively for the better part of the last decade and change, and we know for certain that closing an account does not inherently hurt your score. Check out this p”
“This feels like tautology but I guess it's necessary to say: Closing an account prevents the account from aging. No it doesn't. Closed accounts remain on your credit reports and continue to age for another ~10 years following closure, and are counted in all aging metrics during that decade of time. See the Myth thread provided by u/Funklemire , as this topic is extremely misunderstood. Telling them "it's a myth that closing an account lowers your credit score" completely mi”
“This feels like tautology but I guess it's necessary to say: Closing an account prevents the account from aging. It's not tautology at all; that's incorrect. That's because after closure an account stays on your credit report for ten years and continues to age and continues to count towards your Average Age of Accounts (AAoA) that entire time. And after that decade has passed and the closed account drops off your report, your other accounts that have been aging during that time w”
“I went from 15 to around 5. most of my open close accounts are business cards that don't affect my personal account when closing and when i get a personal I usually plan to keep them open. I just cleaned out a bit after taking a break from churning and my scores when from around 770 to 830 scores. Did this to lay low on the inquiries after purchasing my home and getting a mortgage. After a year has gone by now with no inquiries I will probably jump back in and churn again haha.”
Closed cards in good standing continue to age on your report for 10 years.
“Can you read? It will not tank your AAoA. It will keep reporting for team years. In ten years it will come off, but all of your other accounts open today will have aged ten years.”
“Nope it won't hurt. But, you might be able to product change it into a different US Bank card if that's of interest to you.”
“You heard wrong- it is a myth as that is rooted by misinformation. https://www.reddit.com/r/CreditCards/s/NfOQaAXk1t https://www.reddit.com/r/CRedit/s/OCPq5BRR7d https://www.reddit.com/r/CRedit/s/HWa27ApuH1 In addition, visit r/Credit to learn more about the many myths, as well as consult the Credit Scoring Primer- closest resource we have to understanding FICO algorithm.”
I’ve heard it could hurt cuz it is my oldest credit card acct.
“Unless it’s your only card, expect no impact if you close it- doesn’t matter the age nor limit.”
“Not a lot of data points out there for your situation. I'll say that while amex and chase tend to be least forgiving of unpaid balances, they are also more consumer friendly than many others, and you'd have a good chance of overturning an internal blacklist denial via reconsideration. Both institutions also have executive escalation lines where you can explain your situation to someone who is more likely to be able to help compared to a front line phone rep. What cards do you currently h”
“Can you elaborate on how AI would hack your card? Do you mean that attackers might gain access to your bank account or that they might be able to run transaction on your card?”
“There is no FICO penalty for closing out any card While there's no "penalty" for closing a card, the number of open revolving accounts is widely recognized as one of the variables used in FICO 8 , and FICO 8 awards additional points at least up to 10-12 open revolvers. Due to this closing a revolver can, and often will, lower your FICO 8 score.”
“ive never had a card closed after i pay off, that would be silly. otherwise several of my cards would close every month. thats not really how that works. you prolly need to talk to the company”
“One of FICO’s reports is credit mix, which I thought displays your ability to manage a large amount of credit. I currently have 10 cards, Are you suggesting closing cards won’t decrease that number? I’m wanting to get a starting credit line of at least 20k for my next card. How should I go about canceling my 9 other cards without hurting my chances of approval for a high cl card?”
“I have a TD Bank credit card that I have not used once since at least the pandemic. They still have not closed it. Not sure why.”
“Fraudulent charges can happen at any time to any card. You need to catch them before a missed payment happens. There is no penalty for having an account inactive. OP has no debt so utilization isn’t worth considering here. You always want to implement AZEO ahead of important applications and AZEO with these cards open or closed would yield the exact same score. I close unwanted accounts because I don’t want to monitor them, and they serve no purpose. I don’t want to waste my time logging in mont”
“Well obviously don't forget about a card if there's a balance on it. And obviously ensure you have no hidden or recurring charges on it. Thank you captain obvious. If you are absolutely sure there are no charges on the card, then cut it up and forget about it Yes closed accounts stay on your record. Yes scores dip when your accounts change from active to inactive and it will almost certainly affect your overall credit utilization. Unless this guy has completely zero balance at any given”
“I would advise against forgetting about cards. We get tons of posts from people who forgot about cards and wound up with a missed payment because they weren’t monitoring their accounts. What metric do you think would be impacted by closing the oldest card? Closed accounts stay on your credit reports and continue to age for 10 years. Any score change would occur a decade from now, and that’s not even likely to occur.”
“I agree with the first part, that's why I was going to say that the account was closed and I'm solely depending on cash now for emergencies”
“You are correct. It’s not a problem to let them close or to close them yourself. Just keep at least one card active.”
“Theres nothing inherently wrong with letting unused account close or even closing them yourself. Yes, they will continue to age on your account up to 10 years. The amount of time it stays on your account depends on its standing, 10 years for good standing 7 years for delinquent standing. You will see a small dip in credit score due to the lower credit limit causing utilization to temporarily increase, but utilization has no memory so it will recover in no time. I'm personally all for closing”
“It can lower it eventually, I explained how below. There's absolutely no downside to keeping it open. Potential downside to closing it.”
“Yeah that’s why I close cards I no longer use. Don’t want a charge or fraud to go unnoticed.”