Should I keep a credit card open to maintain my credit score?

Question

I have a credit card that was opened when I first got out of college, and was my first credit card. Since then, I have switched to cards with rewards, figuring that since I pay it in full each month, as I might as well get some bonus when I spend money.

I have heard that closing an account that has been open a long time hurts your credit score. Is this true?

I hate to keep the card active just to maintain my credit score, as it seems unnecessary and could be a risk if the card is stolen, etc.

Does anyone have any experiences or information about this type of situation?

Answer 1

_{(source: pbs.org)}

This is from the PBS Frontline show "Secret History of the Credit Card."

Getting rid of one card won't immediately trash your score, nor will it be by the full impact (15%) of credit history. If there's no fee, I'd buy gas once per quarter with it. If there is a fee, I'd check my FICO score and if I can afford to lose 20 or so points for a time, I'd go for it.

Answer 2

Assuming you don't plan on continuing to use the card frequently, the best advice I've heard is to leave them open unless they have an annual fee.

Also, leaving it open with a zero balance doesn't help your credit score as much as using it a few times a year (even for small amounts) because it will eventually shift to an inactive state that is less positive for your credit score.

Answer 3

I found a good article on cnnmoney.com that touches on this titled "5 Ways to Destroy your Credit". One of these "ways", it says, is closing your credit cards. The article cited one expert who says,

Since part of your score is based on the length of time certain lines of credit have been open, closing out that 10-year old credit card could take a bite out of your credit score... It's negative because it's taking away a reference to a positive credit history.