Will it hurt my creditanything to that effect if I cancel a credit card? Its all paid off/in good standing?

Question

I have an AMEX. I got a new AMEX (new type of card, not replacement card). I want to get rid of the old AMEX account. Can I do that without hurting my credit? I have perfect credit and don't want it dinged... Thanks!

Someone told me if I just leave it there and not use it, it will actually hurt me... Is this true? I'm not doing any balance transferring or anything. I just will not use that card anymore... I pay everything off at the end of the month in most cases.

The card I want to cancel I've had for a long time, but the new card is with the same company so for tenure, I believe that shouldn't be affected because the two CARDS are on the SAME account.

Answer 1

Depends on your goals. Your older one works in your favor because it shows good history of payment whereas you have to build a new history with your new card.

Answer 2

There is not a simple answer to this question. There are both positive and negative effects of closing a credit card.

There are actually two factors with your situation that could affect your credt score. First, closing an account alters the average length of time that your accounts have been opened. Length of credit history accounts for about 15% of your credit score calculation. Closing an account that has been opened for a long time would affect your score more negatively than closing an account that you only recently opened.

The other factor is available credit. Depending on how much total credit is available to you (including credit cards, department store and gas cards, lines of credit, etc.), creditors may consider it a negative factor because you could potentially take on more debt than you are able to pay. By closing a credit line, you lower the amount of total available credit, which could have a positive effect on your score. On a side note, you'll want to watch your debt to limit ration and make sure that you are staying below 50%. For instance, if you have a total of $10,000 in credit limits among many cards and lines, you need to keep your total outstanding balances below $5,000. It's good to keep each individual account under 50% of the available credit limit for that account.

Basically, if you have a long credit history (longer than 10 or 15 years) and no delinquencies or negative records, closing one card probably won't have a huge impact on your score. But the calculations that are used to figure your credit score are so complex that its hard to say how dramatic of an effect it will have in your individual case.

Answer 3

If you have a credit card, you have a credit history. So, the first thing you should do is obtain a copy of your credit report, review it for inaccuracies, correct any problems and then slowly close unused accounts -- trying to close one per month.

Not having a lot of credit cards decreases your worry of late fees. It is easier to remember your payment dates. Someone with 15 or more cards probably has a difficult time remembering when all of them are due.

Having more credit and more credit cards does not necessarily make a good rating. The key factors are job stability, paying as agreed and paying on time. Keeping up with payments will build a better credit rating than opening numerous credit-card accounts.

Be aware of the terms on your credit card, because those terms dictate your agreement with the creditor. You need to ask about the interest rate and what penalties are attached to the card.

Also, don't close your oldest accounts if you find a better card. "If you close a card you opened in college 10 years ago because you found a better card, creditors will penalize you, because they are looking for a lengthy and successful credit history," says Joyce Murray of Money Management Internal.

According to Experian, one of the three major credit reporting agencies, there's no right number of credit cards for everyone. It depends on how much you spend and how much you can pay off. However, what you can afford at present may change now that most credit cards are increasing their minimum payments.

Just remember that the street of credit fairness runs only one way, and it's in the favor of the creditors. Credit card companies can change interest rates at any time. The most important thing to remember is that you are responsible to keep up with your bills and stay on top of your credit.

Answer 4

You can cancel you existing amex as long as the card is paid in full. On your credit bureau it will show cancelled at clients request and it will also show as a R1. As in this case I believe the R is for a retail account and I is for a loan either a car or bank loan. The most important thing is to make sure the card has a zero balance before cancelling

Answer 5

I just paid off all my debts and guranteed other companies will look at that, for the fact it was more than $5,000 total

Try not to use credit cards for stupid stuff, what you do is pay your balance off in full, every month, to help build up your credit. This is what I do now, if I know I have the money, I will put it aside for that month.

Answer 6

It hurts if you have too many credit cards or too many applications close together. If you are paying them off every month you should still have good credit rating.
Beee carreefull! It's so easy to get sucked in by paying off one with the other & ending up with lots of "almost" paid cards.

Answer 7

It will actually help your credit rating because they look at how many cards you have, even if you don't have a balance on them