Trading one credit card for another?

questions · #1 (**permalink**) 10-15-2005, 02:43 PM

I've recently improved my credit and have both a Visa and a Mastercard with decent limits. I'm getting pre-approved... I've recently improved my credit and have both a Visa and a Mastercard with decent limits. I'm getting pre-approved offers almost every day (I've now opted out). I did get one yesterday that has 0% APR until 2007 and no annual fee. My BofA Visa is something like 17% (never carry a balance anyway) and a $29 annual fee.

I've had the BofA card for 2 years now, just got the Mastercard recently. If I took a different Visa and cancelled the BofA card, would my credit score go up, down or stay the same? Someone told me that if I replaced my bank Visa with one from a larger financial institution, that my credit score would go up.

I don't need the low APR, just trying to build better credit.

dealsaver · #2 (**permalink**) 10-16-2005, 04:16 PM

Creditnet.com is a good place for these types of questions.

Closing a credit card account can reduce the average age of your credit history, possiblely lowering your credit score. Closing an account also reduces your total available credit, increasing your total utilization that arises from any debt that you have reported to the credit bureaus. This could also negatively impact your score. However, no one really knows for sure what will happen based on the information you have given. There are many factors that impact on your credit and the same action that may raise one person's credit score may result in your credit cards being cancelled.

I have never heard the advice your friend is giving you about your score going up by getting a card from a larger financial institution. I do not believe this to be true. Perhaps they were refering to department store credit cards which some other creditors look down upon because they are frequently given out to poorer credit risks.

sweeps · #3 (**permalink**) 10-17-2005, 10:13 AM

I agree with dealsaver. But I would not be happy with an annual fee on my credit card. I would switch to a good rewards card without a fee. The small drop in credit score, if any, would be inconsequential to me.

jhd815 · #4 (**permalink**) 10-23-2005, 12:39 PM

Your credit score is based on a number of factors but the two big ones are 1) how you pay your bills (on time or late?) and 2) your credit history (including the length of credit with your creditors). To the best of my knowledge getting a credit card from a larger institution will not improve your score at all.

You are smart to want to build a positive credit history. Remember, there is no quick way to fix or change your credit score. Paying your bills on time is the best way to build your credit.

You may want to check with BofA to see if they could offer you a better rate. If they do offer you a better rate, make sure it is a contract rate and not a promotional rate (one that expires after a couple months or whatever).

Good Luck!