Credit Card ?

[disny_luvr]

I have a credit card through Wells Fargo that's been open probably for about 10+ years. The credit limit is $15,000. I haven't used this card in years and don't have a balance on it. I just got a letter from Wells Fargo that said if I don't use this card by 12/1/15 it will automatically cancel and the account will be closed, which in all honesty I'm fine with. However, I'm worried how this will affect my (and DH's) credit score. This is a joint account, so both our names are attached to it. We don't have many credit cards - a Discover card in both our names with $0 balance, we both have a Disney Visa with $0 balances and I have three store cards (in my name only) - Gap, Loft and Kohl's all with $0 balances. We both have high credit scores - mine 801, DH's 805 (this was from April when we bought a car). Should I just let this card close and not worry about it?

 

[Trixie Belden]

That would ding your credit score quite a bit if you let that card close. Just fill up your car with gas once and pay it off immediately to keep it open. The high limit and the length of time you've had it open is helping your credit score in a huge way.

 

[tvguy]

I am told it will lower your credit score. I did the same thing, didn't change my credit score enough to impact anything.

 

[ebradley23]

This just happened to me. I didn't get the warning letter though. I just got a letter saying it had been closed due to inactivity. I waited a couple of months to check my score, and it only dropped 3 points. Not enough for me to worry about.

 

[RitaE]

The biggest factors in closing a credit card are

1. It will eventually age off of your credit reports. One of the parts of a credit score is average age of credit. If your other credit cards are significantly "younger" this could harm your score.

2. Percent of available credit used. It doesn't sound like you carry a balance on any of your cards so this might not effect your score that much since your percent of available credit should always hover around 0 to 10%.

3. Recent inquiries. If you close that card and then say …. 5 years from now you want another one you will have to re-apply, which will give you a "hard hit" on your reports. This really won't effect your score much, but it is out there as a factor.

It's really up to you but in practice, any score well over 760 is going to get you the best rates on financing. I don't think you are in much danger of harming yourself there. But if you see yourself wanting to be approved for something like a large mortgage in the future, you might want to play it on the safe side and protect your score.

On the other side of the coin you need to consider the risk of having unused credit lines open. Any open credit line has the risk of having the number stolen and used for unauthorized charges. You will eventually get that cleared up but it is a real pain in the butt to do that.

If you want my opinion I'd be more likely to close one of the store specific cards, unless you use them a lot to get store discounts.

 

[disny_luvr]

Thanks for the advice everyone. I think I am going to let the credit card account close on its own and stop thinking about it. We don't carry a balance on any of our cards and both the Discover and Disney Visa accounts have been open for about 5-6 years. We have no plans on taking out a mortgage anytime soon (we just built our house about 5 years ago) and we aren't planning on buying a car either. At least I don't have to worry about having this account open anymore (and the potential for someone to get their hands on the account info).

Thanks again for your advice!

 

[TinkTock]

I've also read that it lowers your credit score to have a card closed by the issuer, so if you're going to let it be closed, you might want to do it yourself.

 

[scrapquitler]

That would ding your credit score quite a bit if you let that card close. Just fill up your car with gas once and pay it off immediately to keep it open. The high limit and the length of time you've had it open is helping your credit score in a huge way.

I agree with this. Clark Howard suggests keeping your cards open, even those you don't use often. Make a small purchase once or twice a year, pay off the balance before the due date and keep your credit score high. Closing an old account with a high credit limit WILL ding your score.

 

[Golf4food]

We have a card we don't use or carry a balance on, but it is our older revolving account. I have my Netflix charged to it every month ($19.33) and then have an automatic payment from my checking account go to it for that amount a day or two after the Netflix charge hits so it always has a zero balance but always stays active. No reason to close a good, old account. Just charge something small to it monthly or quarterly, pay it, and leave it alone. It doesn't hurt anything at worst and helps at best.

 

[Disneefun]

Also, a credit limit that high could come in handy in a big emergency. Sure, you wouldn't want to use it if you could help it, but if you had a job loss or other catastrophe, that 15K could come in handy if you'd exhausted all your other savings and emergency funds. You already have the credit. If you lost a job or something, you wouldn't be able to get a credit limit that high, if anything. I'd keep it as a just in case card.

 

[DOOM1001]

No reason to close it,use it to put some gas or go to McDonalds and pay it off right away.