Closing One More Credit Card

discover_miles.gifI just shrank my wallet by one more credit card as part of my effort to simply our finance :)

Back in July 2006, I applied for a Discover Miles card for the purpose of using its 12-month 0% balance transfer. Ever since I got the card, I haven’t used it for anything else, though Discover once in a while had promotions giving 5% cashback on qualified purchases. I never took advantage of any these promotions. After the 0% promotion ended in July, the card was basically idle in my wallet. Though I have owned several Discovered in the past, somehow I was never a fan of their rewards program.

As a travel card, the Miles card actually has quite good benefits, such as no expiration of miles accumulated and cash redemption, but I have a Citi PremierPass Card that I want to keep as the travel card (I don’t travel a lot though). Therefore, there isn’t much to hold on to a card that I have no plan to use. Plus since it’s only a little bit more than one year old, closing the account won’t significantly shorten my credit history.

So tonight I called Discover to close the account and move the credit line to another Discover card that I had since 1999. In fact, if I want to keep one Discover card, I will definitely choose the Miles card, not the regular card. The only reason to keep the regular card is its long history that I don’t want to lose.

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3 Responses to “Closing One More Credit Card”

  1. Chinese Texan |  Dec 10, 2007 at 10:58 pm

    ?喜!

    Congrads! Your site is among the top 25 financial blogs sites.

    http://www.yourcreditadvisor.com/blog/2007/09/25_most_influen.html

  2. Josh |  Dec 11, 2007 at 9:32 am

    You’re absolutely correct that length of credit history affects your credit score (by about 15%). However, I have previously read that closing an account will not affect your history. Yes, the account is closed; it does remain on your credit report, however, and it demonstrates that you have had credit since the date on which that particular account was opened.

    It’s really the average age of accounts that matters most. So, if you have one account opened for a long period of time and subsequently open several new accounts, your score will decrease due to the young average age of accounts.

    Credit scoring agencies are relatively secretive in their methodology, but I would love if you would include a primary source to support the widely-held assumption that closing an old account hurts your credit score, because of age alone.

    Thanks! I enjoy reading and have found many helpful posts here.