Ask the Credit Expert: Should I Cancel a Credit Card I’ve Had for 12 Years?

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This is the first installment in a series called, “Ask Kay” (the Credit Expert) in partnership with the fine folks over at Credit Karma. If you have a credit question you’d like answered in future posts, please send us a note!

“Kay” is Kayleigh Gaddor, Community Manager at Credit Karma.

Dear Kay:

Should I close a credit card I have had for 12 years? This was my first card I ever got. They charge me a monthly fee of $5 and a 17.90% APR. They can’t waive the monthly fee but are willing to lower my ARP. I know I can get a lower card elsewhere. Please help.


Kay: Great question! The answer to this depends heavily on your specific financial situation and your current credit report. The age of your open accounts is an important factor in your credit score. Having older accounts in good standing demonstrates stability and responsibility, which is very important to lenders. In general, we recommend keeping credit card accounts in good standing open as long as possible. However, your situation is a little unique— that $5 monthly fee really adds up. You’ll need to decide for yourself whether or not the $60-a-year in fees makes this account worth it to you.

Other factors to consider include your payment history for this card, whether or not you regularly use this card, and how many other credit cards, if any, you currently have.  Building healthy credit is all about saving you money in the long run – there might be a card out there that can do just that by giving you rewards points or cash back.

Why do I have more than one credit score? Why doesn’t the score you show match the score a bank pulled for me?

– Toni

Kay: It’s a common misconception that consumers have one “true” credit score. The reality is that you have multiple scores from the three main credit bureaus. Since your lenders are not required to report to all the bureaus, information can vary on your three credit reports, which may result in different scores. Additionally, even within the same bureau, you can have multiple credit scores because there are dozens of different formulas used, depending on the lender’s needs. One formula might emphasize payment history while another weighs credit card utilization rates more heavily, so even if the data is thesame, the scores won’t necessarily be.

Rather than worrying about the different scores you receive from different lenders, we suggest tracking one score model over time to observe changes to your credit health. Tracking your credit health with Credit Karma is important because we show you additional details, such as changes to the different components of your credit score, and any updates to your TransUnion credit report. Plus, it’s free, which we think is pretty great.

How do I start building credit? What types of accounts count towards a credit score?


Kay: Having a good credit score opens doors and makes your life easier by making you eligible for lower interest rates and better financing terms. It’s great that you’re thinking about building credit early. Using credit responsibly is an excellent way to build your credit score and prepare you for obtaining larger lines of credit, such as a mortgage, in the future.

It’s important to know what does and does not affect your credit score. Checking, savings and investment accounts are important to your personal finances, but they have no impact on your credit score. Likewise, your rent payments and utility bills are generally not included on your credit report and won’t count toward your credit score. However, if you fall behind on your utility payments, they can be sent to collections and cause your credit score to fall.

Credit cards, mortgages, loans and other lines of credit all count toward your credit score. If you are new to credit, you may want to explore secured credit cards and student credit cards, as they typically have higher approval odds for consumers with low to fair credit. Other items that affect your score include court judgments, collection accounts, late payments and hard inquiries. You can see a rundown of these items in the Credit Report Card on Credit Karma. You should minimize these factors whenever possible. With a little planning and hard work, you’ll start to build a healthy credit history in no time. Good luck!

Content is for entertainment and information purposes only. The opinions expressed in this article are those of the authors themselves, and not necessarily Credit Karma or its affiliates. This post has been sponsored by Credit Karma.

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  1. dojo says:

    Excellent tips, will keep an eye on these articles, there’s a lot to be learned, even if not all advice applies to me (am not in the US). Keep them coming ;)

  2. Pingback: I Love You Like a Blogger Roundup – 7/4 | Enemy of Debt
  3. These are great points. I do agree when closing out credit that you don’t need to have open credit lines for the sake of having them. Thinking about your future plans of credit is important to determine when to close out a card. There is also a calculation one can use to determine the average age of credit accounts.

  4. I liked the question regarding the number of credit scores…there’s SO MANY different types of credit scores, and nobody ever explains them. But then again…I’m sure that’s exactly how the credit industry wants it….

  5. Thanks for the good info, Kay. I especially liked your feedback on closing long-standing credit card accounts. We have several different ones out there and I don’t like having all of that available credit hanging around.

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