Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Cards
Profile Image

Question By
kristent211

0 Contributions
0 People Helped
Can I cancel a credit card that has a small monthly limit?
I started a credit card a while back with a $200 monthly limit so that I could build my credit. It's not a good credit card company at all, but I have built my credit and I am opening an account with Chase now. Will it hurt me to close that old account? I don't want to keep it open forever and pay the annual fee on it, I would rather have two "stronger" credit cards.

What should I do here?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
7351 Contributions
3807 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

If you get the Chase account, then you might consider cancelling this small limit card due to the annual fee. But only AFTER you get the Chase card. Your credit score might take a bit of a hit, but frankly, I don't like credit cards with fees either.

Top Contributor
36 Contributions
11 People Helped

I started a credit card a while back wit

I guess the only question I have is, "how long a while back?"  Generally the disadvantages of closing a card are: your utilization rate goes up, the average age of your credit goes down, and the number of credit accounts goes down.  Getting rid of a $200 line of credit is probably not going to dramatically affect your utilization rate.  Depending on how long you've had the card, it might affect the average age (one card for 10 years plus 2 new cards averages to 3.3 years while one card for 3 years plus 2 new cards averages out to only 1 year but closing the card altogether would lower the average to zero until you had the new cards for a while).  You've only got one card now so adding 2 new cards, whether you close the existing one or not, is somewhat better from a number of accounts standpoint, although FICO does keep track of how many cards you've had not just how many are open and active so that's sort of a push.   I don't now your situation but the only reason I would close the current card would be if the fees were financially onerous or I just really hated paying them.  I'd probably get the new cards and keep the old one for one more year and then reassess.  Just my 2 cents.

Top Contributor
5038 Contributions
1134 People Helped

I would not close it, but if you do, WAIT until you get the other cards.

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.