How much will it really hurt my FICO scores to cancel a credit card?

Question

I don't owe them anything, my FiCOs are in the 760 range, i have plenty of revolving debt, a mortgage, other major credit cards, department store cards, etc. Yeah, I could keep the account open and just not use it but this credit card provider, Chase, is just so scuzzy that i want nothing whatsoever to do with them.

Can anyone give a ballpark estimate about how many points this will nick me for, if any? Thanks.

Thanks for the answers so far. This is by no means my oldest trade line but does have a fairly high credit limit. It sounds like overall i have little to worry about.

Thanks for all the information. In case anybody is interested, here's my decision. I will keep the Chase card active and the account open but not use it for anything (I never run balances anyway). I am shopping for another card to bump my total credit limit before closing it. I have set my privacy policies to the maximum with Chase so that those robber barons can't sell my information. When I do close the account, I will send the request by return-receipt email asking them for verification that the account is closed. And, I am writing letters to the Better Business Bureau and my state's attorney general's office about some of Chase's business practices.

Answer 1

It depends on how long its been open and the credit limit and how much you owe on your other credit cards.

If it's you oldest trade line, it could damage your score quite a bit. If it is your biggest limit card it may throw off your capacity ratio. For example, if I have 2 credit cards one with a $1000 credit limit and another with a $5000 credit limit and I owe $500 on the first card then I only owe 8.3% of what I have available, this may lower my score by 4-5 points, BUT, if I close the $5000 credit limit, then I owe 50% of what I have availble, cuasing my score to drop by 30-50 points! Capacity is huge.

Remember your income is not on your credit report so the assumption is that if you don't use all of your limits, then you don't need the money, but if you do, you NEED the money and must be struggling. Therefore, your score goes down.

The FICO is an indicator of financial health and how likely you are to go into bankruptcy. It may be your best bet to leave the card open and not use it very often, if you do, make sure you can pay it off at the end of the month.

Answer 2

Here is why canceling cards can hurt your score, surprisingly. Your credit score, aside from on-time bill payments, is based on two other variables: your income to debt ratio and your debt to credit available ratio. In this case, if you cancel the cards, let's say each card is granting you at least a $5,000 credit limit, you are decreasing your available credit by almost $15,000 while your other debts stay the same. If on that last card you have it maxed out (which you say you don't, but for example), then yeah this would reflect badly. If though you can get rid of the balance on your fourth card, maybe even ask the card company to raise your limit if you're thinking of keeping it and you qualify, then slowly cancel the other 3 cards one at a time, this might put you in better shape. Still, the fact you had nearly 4 credit cards on your record is going to bite you a bit eventually, but credit does heal with time. If you haven't seen your credit report in a while, I would try making sure you have no credit card debt and cancel one of them. Then a month later, check your credit report (you can get a credit report for free once a year). See where it falls. Anything above 650 is considered a great score, so if you're above that, I'd think you'd be fine to get rid of the others too.

Answer 3

While closing the account will impact your score, it should rebound quickly.

Make sure to close the account in writing and request written confirmation that the account is closed.

This is particularly important with Chase. I closed an account and a year later got a bill for annual fees. Seems they didn't close the account, just lowered the credit limit way down.

Answer 4

It won't hurt you so much. Be sure to pay if off and close the account though, or they'll leave it open!

Answer 5

Should help your score actually. Shows you're getting rid of unneeded credit.