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6:47 am
March 12, 2012
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MyCanadianFinances
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Good Morning Yakezie,
I currently have one store credit card that I am looking at canceling. I was just wondering if there are any adverse affects to my credit score/report.
Thanks for all your expertise!
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9:27 am
March 12, 2012
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John @ Married with Debt
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| Member | posts 239 | 
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FICO score depends partly on your debt to credit available ratio. Cancelling one will lower your score, as it changes your ratio.
Doing financially smart things sometimes gives you a lower score. They want you to feel like you did something wrong.
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10:22 am
March 12, 2012
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Eric – PersonalProfitability.com
| | Portland, OR | |
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You can load up your info into Credit Karma and try out their tool to find out your estimated impact on your score.
Unless it has an annual fee, I would not cancel it.
Also, FICO is a US based score (I believe). You should check how the Canadians handle it to be sure.
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10:42 am
March 12, 2012
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MyCanadianFinances
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If I let the card expire and do not re-activate the new one they send me will that be as bad as cancelling it?
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10:50 am
March 12, 2012
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Eric – PersonalProfitability.com
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Cards should never expire, they are alive until you cancel it or the issuer cancels it.
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5:38 am
March 13, 2012
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Frugal Confessions
| | Houston, TX | |
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Hey Eric,
My cards all have expiration dates…do you mean the line of credit never expires without someone cancelling it?
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6:23 am
March 13, 2012
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Michelle (Making Sense of Cents)
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MyCanadianFinances said:
If I let the card expire and do not re-activate the new one they send me will that be as bad as cancelling it?
Even if the card expires, they will still send you a new one, so your credit and account with them don't actually expire.
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10:04 am
March 13, 2012
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Eric – PersonalProfitability.com
| | Portland, OR | |
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Frugal Confessions said:
Hey Eric,
My cards all have expiration dates…do you mean the line of credit never expires without someone cancelling it?
Every card expires, but the account does not expire. The bank just sends you a new card on the same account. This is for security reasons primarily, and because credit cards tend to crack and wear out after a few years.
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9:21 pm
March 13, 2012
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Jeff Rose
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How many other credit cards do you have? If you have 3-5 others (thinking Visa and MC), then I would cancel it.
I opened too many department store cards when I was in college and prior to being deployed to Iraq I went on a cancelling spree. I didn't see any severe affects to my credit score by doing so but I also had 3 credit cards that were using to demonstrate that we still had a credit history and available line of credit.
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4:49 am
March 14, 2012
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MoneyBeagle
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If it's your oldest card and your 'newer' cards are significantly newer, you could hurt yourself. Say your oldest card is six or seven years old and the rest are only two years old. Canceling the one that is six or seven years old would then make your oldest card only two years old. This would negatively impact your score. However, if it's a newer card or if the gap isn't as significant, then chances are this wouldn't come into play.
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7:38 am
March 14, 2012
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OneCentAtatime
| | Florida, USA | |
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You willd efinitely have score decreased by cancelling card
1. because your debt/credit ratio will go up
2. because old revolving credit line is closed
The decrease will be recovered in approximately one year or less if you continue to remain current on all other loans.
So do not close account if you need a loan/mortgage in a year.
If you want to buy a house/car in say – 2 years or more from now, then close the store card, apply for a general purpose reward card and also call or your card issuers to increase your lines.
All these could lower your score to 15 or more immediately but within 2 years you would wipe off all losses and would end up in positive territory.
Its my work domain so take my word.
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2:01 pm
March 17, 2012
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MyCanadianFinances
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| Member | posts 49 | |
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Thanks for all the great responses. I called up the company and made sure there were no fees attached to the card. I will take your advice and keep it. I will just not use it from now on.
Thanks yet again!
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8:39 am
March 27, 2012
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Ferratum
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Eric – NarrowBridge.net said:
Frugal Confessions said:
Hey Eric,
My cards all have expiration dates…do you mean the line of credit never expires without someone cancelling it?
Every card expires, but the account does not expire. The bank just sends you a new card on the same account. This is for security reasons primarily, and because credit cards tend to crack and wear out after a few years.
Nicely put Eric. When your card expires see it as the actual card expiring rather than the account itself.
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