What If I Close My New Credit Card Account?

Posted On: March 23, 2007

Author: Brammy
Posted: Sat Mar 10, 2007 6:08 pm
Post subject: Closing a new account

I am considering closing a new account because it has no rewards and I am really interested in a rewards card at this time. The account has been opened for two months and is at a zero balance. One of those mind fugues. If I close it my utilization will be 30% across the board. Do you think closing this recently opened account will help my scores since one of the reasons I get on FICO is too many recently opened accounts?

By your own admission you’re closing the account because you want a rewards product. Seems to me you’re going to open a “new account”.

I believe the answer is NO. It will not help increase your CS because you’re going to net out.

However, if you get your new card with a hefty CL, your overall utilization will drop.

Right now I’m just over 20% and utilization will only be 30% AFTER closing the new card. Maybe I’m misunderstanding your response?

Why not try to convert to another card that offers rewards from the same issuer?

Closing a card can never help your credit score in any credit scoring model I’m aware of. It certainly won’t help any FICO score.

Quote:
Do you think closing this recently opened account will help my scores since one of the reasons I get on FICO is too many recently opened accounts?

You still have as many “recently opened accounts” if you close this one. And this one will stay on your credit reports for at least 7 years, maybe longer. All that closing it will accomplish is that your credit availability will go down and your utilization numbers will increase. Closing it is pointless.

Closing a card to avoid paying a fee is a good reason for closing a card–it’s the only reason I can think of, unless you’re involved in some intricate aging predictions that will start seven years from now, maybe.

Thanks for the replies. Guess I’ll leave it open for now. Got a feww pre-apps that I’m more interested in than what this issuer offers for CashBack and rewards. Just didn’t want too many open but I use two of my 4 cards for my small business and am waiting til next year for business credit card since I’ve been in business for less than two years that seems to be the cutoff for the business card denials.

Almost where I want to be though. March 08 my bk should be aged enough not to have too much of an impact on getting business credit with a personal guarantee.