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I recently got a credit card through my bank that is superior to the one I was using previously (the first one was a secured credit card that I used while I was establishing my credit history).

My question is whether I should cancel the first account or keep it in case of an emergency. Can either option affect my credit score/report? Are there any other potential side-effects I should be aware about related to either choice of action?

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  • Did you get the security money back on the original card? I assume both cards are through the same bank and the accounts are linked in some way. Do they appear together on your credit report?
    – SpecKK
    Commented Aug 31, 2010 at 21:20

3 Answers 3

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Yes, cancelling the credit card can affect your credit history negatively, if it was your oldest credit card.

The length of time you've been using credit is one metric that is used to calculate your credit score. I agree with Alexey - keep it if there's no annual fee.

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Keep it if there is no annual fee attached to that card. Yes, closing a credit card can affect your credit score as it decreases the amount of liquid assets available to you.

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    Credit is not a liquid asset, it's credit. It's often helpful to have multiple credit lines available. It can be helpful to have as much available credit as you might need and can responsibly handle while still maintaining credit utilization ratios below 50%.
    – SpecKK
    Commented Aug 31, 2010 at 21:24
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    Credit is not a liquid asset, its liquid liability in waiting :)
    – llkajdls
    Commented Sep 1, 2010 at 9:42
  • In simple words - I would rather give a credit to someone who has 10 credit cards rather than 1 credit card (if all other things are the same, e.g. credit history, income, etc).
    – Alexey Kalmykov
    Commented Sep 1, 2010 at 13:01
  • To Spekk - please read Wiki: assets are economic resources. <...> Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset). en.wikipedia.org/wiki/Asset
    – Alexey Kalmykov
    Commented Sep 1, 2010 at 13:03
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I would say cancel it, but going through the answers already given, I would say that this is a very local answer. Where I live, people having 10 cc are usually in very serious financial problems, where paying of one credit card is done with the others.

I am using a credit card (as most of my peers) as an alternative form of paying. All payments are taken from my bankaccount in the same month. CC companies encourage payments by cc by offering insurances on goods paid with that cc. The interest rates cc companies ask, are often so high that in case you need a loan you are better of taking that loan directly from the bank. My position on credit cards is that they are very interesting tools in doing payments, but refrain from using it as a loan.

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