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I am 20, and just opened an airlines credit card in order to save a lot of money on plane tickets. My credit score is currently 728, but I know that does not mean much because of the relatively short credit history I have. For the past year I have been using a single credit card to make purchases and I always pay off the entire balance before the due date. Recently, I saw a great offer to save money on plane tickets by opening an airlines credit card. The annual fee is $99, but the savings is far greater than the annual fee. I'd like to pay off the price of the tickets, and the annual fee as soon as I get my first statement, and then cancel the credit card. I know I am not going to use it again, because I rarely fly so I can't justify spending $99 a year. How will this affect my credit score?

From research I've done online, it sounds like there is minimal impact of closing a card if I do not owe anything on any cards. Is this true? I will definitely have a $0 balance on my other card when I close the new airlines card.

FURTHER EXPLANATION: My question does not match the "duplicate" question, because I am not looking for how my credit may be impacted by keeping the card open, nor am I talking about closing a card that has been open for a long period of time. The card will be a month old, or slightly older, when I close it.

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  • Also: money.stackexchange.com/questions/16811/… – BobbyScon Jan 10 '17 at 16:59
  • Also: money.stackexchange.com/questions/13198/… – BobbyScon Jan 10 '17 at 16:59
  • I'm very disappointed that 2 of the 3 links there- and even the highest scoring, but not accepted, answer on the third - are under the misconception that closing an account has any meaningful impact on the average age of accounts portion of the FICO score. Do we really have so little consistency here? – Joe Jan 10 '17 at 17:24
  • And - @SVN600 - those questions answer your question well. The fact that you're closing a card soon after opening it has no impact in and of itself, it's the age of accounts (Time from opening an account to present day) that matters. – Joe Jan 10 '17 at 17:25
  • @Joe - we do have some work to do. Questions like this often get wildly differing answers. – JTP - Apologise to Monica♦ Jan 10 '17 at 19:28
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Closing the card will be fine.

The consequences are related to your available credit and actual/potential utilization. If you have less total credit, any credit you actually use will be a greater percentage of your total credit, manipulating your score downwards more greatly.

The next consequence will be related to the age of your credit history, which is an average of your credit lines. This seems negligible and also beneficial for you, since your credit history is so young to begin with.

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Closing a credit card decreases your total available balance, which can have a small negative effect if that credit card is a significant portion of your available credit. If it is not, then it likely will have little impact on your credit in that department.

However, the case you explained - get a card, use it for a short while, then dump it - won't have much long-term impact to your available credit, since you will end up with the same amount as you started.

The second factor will be the average age of accounts. This will affect you both in the short and long term, if you've had accounts open for a fairly long time, but won't impact you much if your credit history is fairly short. Even closed accounts affect the Average Age of Accounts for FICO scores (but not for some other scoring methods such as VantageScore). If you have only one other account, and it was 10 years old, then opening and closing this decreases your average age of accounts from 10 to 5 years - a significant hit which will not go away for years (10+ years in some cases, though usually 7 years). This will lower your score some. If you have had a lot of accounts, though (including things like mortgage, student loan, etc.), this won't have as significant of an impact, and if you had a short history in the first place, it won't hurt you much either.

The third factor will be the hard credit pull. That will have a small negative impact for around six months; so don't do this just before getting a mortgage, but mostly this won't be a significant impactor for you.

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