Should I close my oldest credit card?[ Edited ]
Should you close your longest standing credit card if you do not use it? It has a higher credit limit, but hasn't been used in several years. Is it safe to close or should I just leave it open so not to affect my credit score? Thanks
A: It depends on what you're trying to accomplish and your specific situation at the point in time you make the move. There's no way to predict exactly what would happen to your credit score if you close that account. If you have other outstanding balances, my guess is that closing the account would have a negative impact on your score.
That’s primarily because you would reduce your available credit limit, potentially increasing your utilization ratio (credit used/available credit). While length of history is another less important factor that impacts your score, closing this credit card would probably not have a dramatic impact from that standpoint, but again whatever impact it did have, my guess is that it would be negative…at least in the short term.
From a purely credit scoring standpoint, it would probably make more sense to keep, periodically use and then pay off your oldest card each month.
In my mind having a couple of credit cards makes sense, but if you’ve got more than that I think that downsizing is a good plan. If you don’t have any major purchases on the horizon you could move forward with your plan and monitor your credit score in the coming months. On the other hand, if a big purchase is on the horizon (home, car, etc.) I wouldn’t close your oldest card—a move that could decrease your score—until that purchase is behind you.
Unfortunately, the “mystery math” behind a credit score makes it impossible to know exactly how one action will affect your score. And frankly, with a slightly different situation the same action could affect someone else’s score differently. I’m sorry that’s not more direct advice, but hopefully it gives you some things to think about as you determine your next move. Good luck!