Canceling a Credit Card

Does it always hurt your credit score? I have 2 Amex cards and I'd like to cancel one of them (good intro rate that is about to expire and I don't need it anymore).

Re: Canceling a Credit Card

I had a GM card that I cancelled because we aren't buying cars anymore (we are just going to lease going forward). I wanted to get a different card to earn points with that I could actually use.
So I closed that and opened a Capital One Venture card so I could earn travel points.


It didn't touch my credit score at all.

ETA_ probably because I replaced it with another card, come to think of it.

Message edited 6/6/2016 5:09:56 PM.

Canceling a Credit Card

I find it doesn't affect it that much, but yes, your score will go down depending on how much your credit limit was on that card... The premise is that you are taking away from your total available credit. So your debt to credit ratio drops.

Canceling a Credit Card

Ok. The 2 things can affect your credit score the most when closing a credit card:
Lingevity of that card
Limit.

If the card you want to close is one of the oldest you have UNDER NO CIRCUMSTANCES SHOUKD YOU CLISE THAT CARD. EVER. part of your credit score is based on how long you have had credit. So if you have had this card for a long time, or its your second oldest card do NOT close it.

Also. If you have a crap load of credit available then it prob won't hurt to close this card. If you have a lot of credit cards with balances that are higher than 50% then don't close this card. If you want to pm me with specifics I can give you a better idea if you should close the card or not.

But if you have (let's say) 20k available credit on all your cards. Lest say you have 4 credit cards and owe $10k. Right now you are using 50% of the available balance. That's not good. If you close this card you making that 50% number go up. The higher the number the worse. That means you diminish your available credit. That's not good when you have a lot of balances.

My advice is if it's fairly new, you have MANY cards that are years and years older than this, don't really have much of a ball ace on ALL your other cards then it's probably OK to close.

But generally I'm not a fan. Again if you want to fm me detailsnincan give you a better idea.

Message edited 6/7/2016 12:06:38 AM.

Re: Canceling a Credit Card

Canceling a Credit Card

In my opinion, unless there's a yearly fee keep the card.
There's no harm in having credit cards open but unused.

If you are concerned about having a card and the temptation of using it, then cut it up and that's it (although I would keep the card and use it once a year so they won't close it based on inactivity).
You could always just stick the card in your safety deposit box or in the bottom of your drawer so you won't use it.

To add to what Paramount posted.
3 main factors that affect your credit score:
1. The amount of total credit being used. They want to make sure you're not approaching your limit and you have lots of "breathing room".
So its better to have a bunch of cards (as long as you can control your spending) because that will give you lots of available credit.

2. How long is your credit history - longer is better of course - my parents added me to their cards when I was in high school (I never use the card without their approval) so I could start getting some credit history

3. If you recently applied for a card/loan - applying for a loan or a credit card will cause a credit inquiry (hard inquiry) and that will lower your score for a bit of time.

Re: Canceling a Credit Card