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Old 04-29-2008, 01:07 PM
 
Location: Parker, CO
1,135 posts, read 2,908,258 times
Reputation: 1946

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I currently have two credit cards... both are AMEX cards. I opened the first credit card account in 2002 and used that card until 2004 when I opened a second credit card that gives me airline miles.

At this point, I only use the airline miles card and have only used the other card twice in the past 4 years (when I lost the airline card). I do not have a balance on either card, as I pay the balance in full each month.

I have kept the original account open because I have been told that closing a credit card hurts your credit rating. Nonetheless, I do not use the card so keeping the account open seems useless. Any advice??
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Old 04-29-2008, 01:10 PM
 
Location: Boise, ID
1,356 posts, read 5,709,301 times
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My understanding is the part of your credit rating is based on the percentage of available revolving credit you are using. Amex says they have no limit (they actually do but they just don't print it on the statement) so I don't know if having an open Amex card would count towards you using a lower percentage of your available credit.

How's that for a non-answer??

Since it has an annual fee I would probably close it.
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Old 04-29-2008, 02:07 PM
 
Location: Alaska
5,356 posts, read 17,166,268 times
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Since it's the card with the longest vredit history, closing it will hurt your score. If it doesn't have an annual fee, I'd charge something on it about once every 6 months to keep it active.

If it has a fee, I'd call the company to see if they'll transfer the history and card limit to your miles card so you don't take the credit score hit. I'd also replace it with a no-fee card as a back-up card incase you lose your miles card again.
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Old 04-29-2008, 10:26 PM
 
28,900 posts, read 49,222,298 times
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Hang on. AMEX is a charge card, not a credit card. So you're obligated to pay it off completely at the end of the month.

From a finance standpoint, credit cards are not inherently bad. It's keeping a balance on them that's inherently bad. At the same time, you never know when you might need to tap into that readily available credit for emergency. Who knows? The car might die on you. Your 1040 takes a bigger bite than expected. You have to fly across country for the funeral of a loved one.

Those are times when you may need the flexibility that a credit card offers. So you should hang on to them, but not use them except in emergencies. Because you never know when they'll come in handy.
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Old 04-30-2008, 10:15 AM
 
Location: Parker, CO
1,135 posts, read 2,908,258 times
Reputation: 1946
Thanks for your replies, everyone! My American Express card is actually a credit card rather than a charge card, so I have the option of carrying a balance month to month, which I do not do because I hate paying interest on the balance.

There is actually no fee on either card, so it does not cost money to keep my accounts open. More than anything, I am just concerned that closing the account on one card will hurt my credit rating.
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Old 04-30-2008, 11:35 AM
 
28,900 posts, read 49,222,298 times
Reputation: 46329
Quote:
Originally Posted by downtownnola View Post
Thanks for your replies, everyone! My American Express card is actually a credit card rather than a charge card, so I have the option of carrying a balance month to month, which I do not do because I hate paying interest on the balance.

There is actually no fee on either card, so it does not cost money to keep my accounts open. More than anything, I am just concerned that closing the account on one card will hurt my credit rating.

In that case, I wouldn't close either. I just wouldn't keep a balance on them. You never know when you might need it.
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Old 05-01-2008, 09:22 AM
 
102 posts, read 316,080 times
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Default credit cards

Close out the credit card you are not using. It will not hurt your credit rating. It may however, hurt your credit to have that open line of credit on your file should you need to get a loan. A lender will look at all open lines of credit to determine your credit worthiness.
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Old 05-01-2008, 01:19 PM
 
323 posts, read 1,964,587 times
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I agree, if there's no annual fee and you could restrain from using it unwisely as I'm sure you do. I'd say leave it open!
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Old 05-01-2008, 01:52 PM
 
Location: Alaska
5,356 posts, read 17,166,268 times
Reputation: 4048
Quote:
Originally Posted by mazenblue View Post
Close out the credit card you are not using. It will not hurt your credit rating. It may however, hurt your credit to have that open line of credit on your file should you need to get a loan. A lender will look at all open lines of credit to determine your credit worthiness.
I disagree with this. While having too many credit lines could hurt your chances of getting a loan, having two credit lines will not hurt your chances and may in fact improve your ability to get a loan. Also, since this card has a longer history, it helps your credit score.
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