Closing Credit Cards
Hello Terry,
I have enjoyed listening to you for years on WGN radio and continue to do so as often as I can.
I have six credit cards. I use two of them on a regular basis, and pay them off in full each month. The other four have not been used in over eight months. I would really like to close at least two of the cards, but am concerned about the potential negative impact on my credit score. One of the two cards in particular, I have had for over 20 years.
If I do close two of the cards, how will it impact my overall credit score, and potentially for how long? I am not planning any major purchases or refinancing in the near future.
Looking forward to hearing your advice recommendations.
Thank You,
John De Night
Terry Says
Closing your longest-held credit card will definitely impact your credit score, since length of credit history is an important factor in your score. In fact, it accounts for between 15-20% of your score, depending on the scoring system used. Read this: https://www.bankrate.com/personal-finance/credit/length-of-credit-history-credit-score/
So if your oldest card does not carry an expensive annual fee, better just put it away or use it only on occasion — or make it your primary card. Even if you are collecting miles or points on another card, keep your oldest card active.
Then again, how important is your score if you are not planning to finance any purchases, change insurance policies, or seek a new job? Those are all places where a credit score might come into play.
