Should I close my credit card account?
Guest: artcubed
Credit Expert (100+ Posts)
Post subject: Should I close my credit card account?
Posted: Wed Sep 19, 2007 9:32 pm
So I plan on closing two accounts in the very near future.
I have a Macy's card which I completely forgot I had. It's probably a year old now, and because I never used it, it somehow never showed up on my credit report. I'm going to close it (a store card with a $400 limit isn't doing me much good at this point) but will this cause it to show up on my report as a closed account? Will it report all of those months that I "paid" maybe helping me out a bit?
I also have an HSBC card that has an annual fee if I don't close it by my statement close next month. This is on my credit report, and I'll probably take a small score hit. Problem is, if I close two accounts at the same time, I'm worried about a sizeable score drop that might show up on Citi or Amex's radar. Any thoughts? Should I pay the fee and keep the card a while longer?
_________________
Real FICOs: 680 TU - 680 EX - 667 EQ
TC FAKOs: 680 TU - 631 EX - 668 EQ
Oldest CC is 2yrs/2mnths. No baddies on my report, just a young file with lots of inq's on EX.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: Polonius
SENIOR MEMBER (2 yrs.+ & 500+ posts)
Posted: Wed Sep 19, 2007 9:45 pm
Closed accounts remain on your reports for ten years currently. They still count towards account aging components of your scores, but of course the credit limits won't be used to calculate your utilization percentages.
The Macy's card isn't on your reports now, so I doubt it will appear suddenly simply because you close it. Since there's no fee for it, though, why bother?
The HSBC may affect your score slightly if you close it, but if you don't use it there's no reason to pay that fee. So close it and save some money. Paying to keep your score a bit higher makes little sense unless you're at a critical point in your score level and plan to apply for a mortgage or some other big ticket item. And that's unlikely.
_________________
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: realmedia
Posted: Wed Sep 19, 2007 10:17 pm
Polonius write
Closed accounts remain on your reports for ten years currently. They still count towards account aging components of your scores, but of course the credit limits won't be used to calculate your utilization percentages.
IN MY CASE WITH TRANS UNION ALL MY CLOSED ACCOUNTS DROPPED AND NOT LONGER SHOW AFTER 7 YEARS.
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Guest: LustfortheMoment
Senior Credit Expert (500+ posts)
Posted: Wed Sep 19, 2007 10:33 pm
I fully agree with Polonius. In my own experience, I've seen little change in my FICO when I've closed accounts. Of course, I PIF and therefore haven't worried about utilization or net credit available. If you carry balances and close accounts with significant credit limits, you'll clearly take a hit.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Credit Expert (100+ Posts)
Post subject: Should I close my credit card account?
Posted: Wed Sep 19, 2007 9:32 pm
So I plan on closing two accounts in the very near future.
I have a Macy's card which I completely forgot I had. It's probably a year old now, and because I never used it, it somehow never showed up on my credit report. I'm going to close it (a store card with a $400 limit isn't doing me much good at this point) but will this cause it to show up on my report as a closed account? Will it report all of those months that I "paid" maybe helping me out a bit?
I also have an HSBC card that has an annual fee if I don't close it by my statement close next month. This is on my credit report, and I'll probably take a small score hit. Problem is, if I close two accounts at the same time, I'm worried about a sizeable score drop that might show up on Citi or Amex's radar. Any thoughts? Should I pay the fee and keep the card a while longer?
_________________
Real FICOs: 680 TU - 680 EX - 667 EQ
TC FAKOs: 680 TU - 631 EX - 668 EQ
Oldest CC is 2yrs/2mnths. No baddies on my report, just a young file with lots of inq's on EX.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: Polonius
SENIOR MEMBER (2 yrs.+ & 500+ posts)
Posted: Wed Sep 19, 2007 9:45 pm
Closed accounts remain on your reports for ten years currently. They still count towards account aging components of your scores, but of course the credit limits won't be used to calculate your utilization percentages.
The Macy's card isn't on your reports now, so I doubt it will appear suddenly simply because you close it. Since there's no fee for it, though, why bother?
The HSBC may affect your score slightly if you close it, but if you don't use it there's no reason to pay that fee. So close it and save some money. Paying to keep your score a bit higher makes little sense unless you're at a critical point in your score level and plan to apply for a mortgage or some other big ticket item. And that's unlikely.
_________________
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: realmedia
Posted: Wed Sep 19, 2007 10:17 pm
Polonius write
Closed accounts remain on your reports for ten years currently. They still count towards account aging components of your scores, but of course the credit limits won't be used to calculate your utilization percentages.
IN MY CASE WITH TRANS UNION ALL MY CLOSED ACCOUNTS DROPPED AND NOT LONGER SHOW AFTER 7 YEARS.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: LustfortheMoment
Senior Credit Expert (500+ posts)
Posted: Wed Sep 19, 2007 10:33 pm
I fully agree with Polonius. In my own experience, I've seen little change in my FICO when I've closed accounts. Of course, I PIF and therefore haven't worried about utilization or net credit available. If you carry balances and close accounts with significant credit limits, you'll clearly take a hit.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 2:02 PM
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