Q: I have a Macy's credit card since 1994 with a credit limit of $2,000 and a JCPenney's account opened in 2002, with a $4,000 credit limit. Which account should I close to avoid negatively affecting my credit score?
Here are a couple of truths versus myths: First, having too much credit does not lower your credit score. That myth comes from having too high a credit balance in relation to how much available credit you have. Second, closing an account will not improve negative credit history, this is not a reason to close an account, either. In fact, your Macy's card will continue to reflect that you have had that credit for sixteen-plus years, and your JCPenney's account for more than ten. Longevity of accounts impacts your credit score positively.
The other thing to keep in mind is the potential does exist for taking a hit in closing your account. This depends on your credit balance on this and all your cards, and it is difficult to predict to what extent. For example, if you close an account with a zero balance, the credit limit will no longer be factored into your credit utilization to credit limit ratio. However, if you have other high-limit accounts that are open and in good standing, closing accounts should have less negative impact. But as long as you are not paying any fees, why take the chance? Simply don't use the card (or destroy it), and keep the account open. And of course in the future you can always have a new card issued without opening a new account.
But if you are determined to close one account or the other, the answer is to keep the oldest account alive.
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