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I currently have five credit cards, four of which total $11,500 in credit, the other is a $300 line. I'm a recent graduate not making tons of money, so I don't spend more than $6k per year on things other than rent/utilities.

I'm nowhere near utilizing the full potential of the cards with high limits (I try to purchase everything on the cards with rewards, then pay them off immediately). The $300 card seems to be a waste of time, but it is my oldest line (5 or so years). The other cards are all 1-3 years old.

I know that having long-standing lines is good, but for such a low limit card, is that actually still true? Should I keep this card and make the occasional $30 purchase, or cancel the line? How does it affect my credit score? I'm only keeping it and occasionally using it to have the long-standing account open. But I'd rather not have it if I don't actually need it.

PS - I know that the oldest card won't actually fall off my report for many years.

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    5 cards and one only has a $300 limit? Close that sucker, not worth the hassle. I wouldn't even worry about it affecting my credit score. One tiny card won't make much difference. In fact, I'd look at this as a way to see how your score is affected - check your score before and after and see how it changes (and let us know here!) Losing or gaining a couple points will be temporary at worst. – Rocky Jun 7 '17 at 17:31
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    Yes, plus at least 3 more. Consider closing all 5. – Pete B. Jun 7 '17 at 18:18
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    You build credit by paying your bills, not by having open cards and low income. In fact those two are often recipes for poor credit. Work on building your income, not gaming the credit card system. It is a sucker's game. – Pete B. Jun 7 '17 at 18:22
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    @PeteB. I understand that, but I don't spend more money than I actually have - I budget according to my income. I primarily have the cards for one-time purchases (e.g. an Apple credit card to purchase my work laptop - 0% APR for 1.5 years). I get your point though, one can obviously be reckless with credit. But in my case, given that I budget appropriately and the high limits allow me to more easily stay < 30% utilization, I'd say I'm alright. Unfortunately for me, I won't really have good income until I start graduate school, as I'm currently teaching English abroad. – Chris Cirefice Jun 7 '17 at 18:27
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    I'm with @Rocky, ditch that thing, one less thing to worry about. I'd put money on it having little to no impact on your score. – Hart CO Jun 7 '17 at 20:39
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Your credit report is composed of different factors and each has a different weight. Payment history has the biggest weight, at 35%, while length of credit history is 15%. So together, these two factors make up 50% - there are 5 factors total. Given that your card is your oldest card, and assuming you've made on time payments on that card, it does have an influence on your credit report/score.

I would not close the card, and use it to make occasional purchases. I have a card like that where I only use it to make iTunes purchases - at most a couple bucks every few months.

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    The oldest card is only 2 years older than the next oldest card. Closing it won't have a large, or long-lasting, effect on the OP's credit score. – chepner Jul 10 '17 at 19:13
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If you want to close the card, close it. The impact on your credit score will be minimal, if any, and the impact on your life will likely be even less.

First, as you noted, the history from your card does not disappear when you close the card; it will stay on your credit report for as long as 10 years. By that time, you'll have many years of on-time payments from your other cards, and the loss of this one card won't be significant.

Because the card has a low credit limit, it won't have much effect on your credit utilization numbers, either.

Finally, your credit score might just be high enough that a small drop will have no impact on your financial life whatsoever.

In my opinion, hanging onto a credit card you don't want just to try to attain some type of high score is pointless. Close the card.

  • Thank you for expanding on what I said to put a nice structure to it (+1) – GµårÐïåñ Jul 10 '17 at 18:41
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Closing your oldest revolving account will lower your average age of accounts and hurt your score. No ifs, ands, or buts. The amount it drops is hard to tell, and it may only be a few points if your other cards are fairly old as well.

While the FICO scoring algorithm is proprietary and hard to predict, you can use the official FICO Simulator to estimate the impact. Based on the information you provided (5+ cards, oldest card 5 years), your estimate is 750-800. Performing the same estimate and only changing the number of cards and age (2-4 cards, oldest card 2-4 years), the score estimate drops to 735-785. Both of these estimates assume you have 9% or less utilization. You can probably estimate that your score will drop at least 15 points.

However, it may not matter to you whether your score is maximized. Once you get above a certain FICO score, it doesn't matter. For example, I recently refinanced a vehicle and asked the loan officer about their lowest APR, and found out that they required a 780 FICO for it. Kind of like the difference between getting a 91 or a 99 in a class, an A is an A.

Some other factors you may want to consider before you make your choice:

  • Is this card costing you any recurring fees?
  • Have you tried asking the issuer for an increase or a product change to a more useful card?
  • while "technically" true, the hit comes from the loss of the credit line which results in your utilization going up, ie. you have 5k/20k and then you lose 10k, it becomes 5k/10k and your usage just went up to 50%, that hurts you FAR more than closing an old account, especially if you don't use it and it ends up being classified as dormant, then having it makes no difference either, in fact, it will hurt you, before you close, make sure you pay down as much as you can so you don't get the utilization surprise and should be able to weather it just fine, it's NOT the biggest factor in your score – GµårÐïåñ Jul 10 '17 at 0:14
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    He asked if closing the account would hurt his credit score, which it will, utilization or no utilization. The rest of what you said is true, but is not relevant to his situation. – Rakurai Jul 10 '17 at 0:23
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    Edited the answer to address the above concern. His score will drop, even at <9% utilization. Your point about utilization is valid, and for many it would apply, but not to this particular question. – Rakurai Jul 10 '17 at 19:05
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    "Lower" and "hurt" are not the same thing. – chepner Jul 10 '17 at 19:14
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    @chepner, in this context they are the same thing. A slight score difference of 750 and 749 (as an arbitrary example) might be functionally the same to most lending underwriters, but a change from 750 to 749 is a detriment to the score and a lower score is never better than a higher score. The context is the score, if the score is reduced the score is hurt. The question specifically addresses credit score, not practical creditworthiness. – quid Jul 10 '17 at 19:32

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