Cancel Credit Card

[tqf258]

I just got a letter in the mail from one of my credit cards saying that they are closing the account due to inactivity. I can call and they will review account if I want to keep it open. Its a 10 year old account. Should I just let them cancel it or should I call to keep it active? Its not a card I use.

[kork13]

A few questions to consider.... Do you know what your credit score is? Does it matter to you? Are you planning any big purchase in the next few months on your credit (car, house, etc.)? Do you have another card (preferably of similar age) that you do use more regularly?

If your credit score doesn't matter to you right now and you have other access to credit as you might require, then you can probably let the card be cancelled without concern. However, if you're planning to buy a house soon, you might consider keeping it around for now. But in the end, even if you let it cancel, the impact to your credit score will most likely recover within 6 months or less (assuming you have regular & responsible activity on other accounts).

[tqf258]

A few questions to consider.... Do you know what your credit score is? Does it matter to you? Are you planning any big purchase in the next few months on your credit (car, house, etc.)? Do you have another card (preferably of similar age) that you do use more regularly?

If your credit score doesn't matter to you right now and you have other access to credit as you might require, then you can probably let the card be cancelled without concern. However, if you're planning to buy a house soon, you might consider keeping it around for now. But in the end, even if you let it cancel, the impact to your credit score will most likely recover within 6 months or less (assuming you have regular & responsible activity on other accounts).

Thanks Kork, no big purchases coming up credit score upper 700's have other cards. Don't use any very often!
I guess just the fact that I got the notice due to inactivity kind made me mad. (Why I dont know since I dont use the card anyway!) It is one of my oldest cards though thats why I thought about keeping it. But will just let it cancel I think!

[JustBill]

I just got a letter in the mail from one of my credit cards saying that they are closing the account due to inactivity. I can call and they will review account if I want to keep it open. Its a 10 year old account. Should I just let them cancel it or should I call to keep it active? Its not a card I use.

Since you relayed in another post that this card is one of your oldest, then I fail to see how it would hurt to call and see what is required to maintain the line of credit. As you know, length of credit record matters and when this account eventually drops off in what, 7 years, then your record will be [some unknown period] shorter than it otherwise would be.

If you don't mind, could you share the name of the creditor? Perhaps the information will provide others here a heads-up as to the current actions of this company.

[Wino]

Closing a credit card will have two negative effects on your credit score.

1. It will affect your "longevity" factor in a negative direction. This is no more than 10% and probably less than 5% of your score.

2. It will affect your "credit utilized divided by your credit available" factor. If you have ZERO balance, then this will be a negative effect of zero (yes, "negative zero" is a number); however, even if you pay off your balance every month, if the balance is NOT zero when you receive your bill, that's the amount of your balance. Even though you accrued no interest and even though you now owe zero, you do not have a zero balance. This factor is also in the 5 to 10% range of your score.

So, as kork13 said, you can probably let the card cancel and its effect on your credit will be almost zero and will recover over time, but it will cause a slight move downward in your credit score.

Personally, I don't even know my credit score. I think I have my credit score over there in my "don't give a crap" box. It's high enough, and I don't play the "my credit is better than your credit" game.

[PrudentSaver]

tqf258: Don't let them cancel it provided it has a significant portion of your total allowable debt limit. Meaning, if you have cards that total $5000, and that card has $3000 of that, do NOT cancel it. It's alright to cancel it when it has about $500 or less in that same arrangement.

You might want to give this a read:What factors affect your credit score