What CLOSING a Credit Card Did to My Credit Score...
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- Опубликовано: 10 ноя 2022
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Follow up video idea, “What maxing out all my credit cards did to my credit score”.
Hard to do, but maybe i can try maxing out like 3 or so around tax time
He already did that.
thats a problem cause you have to pay it back afterwards 😆
Anybody with common sense will all ready know that would be detrimental to amybody's credit score!
😂😂😂😂😂
I just closed a credit card with a 500.00 dollar amount. But I applied for a Chase card and got a 14 thousand dollar limit
I never considered the fact that closing your newest account could raise your average age of accounts. I guess that only makes sense! Of course, it seems that's only the case with specific credit scoring models, but still cool to see how little your score was affected overall. Thanks for sharing Ben!
Great video, thanks for the info 👍
So glad to find this channel 😮
Thank You. This very helpful.
Thank you so much ..for this info...I have fixed my credit by watching video like yours ....Thanks, Again.
I remember a few months ago I did a large Amex transaction and it was about a week before my monthly credit score was updated. Wouldn't you know it my FICO score dropped 26 points. Needless to say I made sure the balance was paid before the next FICO score update and yes it went back up 26 points on the next cycle. You'll see a temporary decrease but if you pay off the transaction or significantly decrease the balance your credit score will bounce back.
In your scenario with the three Chase cards, the minimum credit limit on each of the two Freedom Visa Signature cards is $5,000. For the card you were closing, transfer all of the credit limit that is over $5,000 to one of the other cards. And then go ahead and close that one with the $5,000 credit limit. That will minimize loss of available credit.
To low or zero utilization will affect your score as well. I was like you and kept mine under 5% utilization. I would always hover around 780-805. I wanted once before I died to see at least one of my scores at 850. It was actually a mistake that made that happen. I forgot to pay a bal. off on my Cap One before my statement end date. That put me at a little over 20%. That's when my scores really started to stay in that 820+ range. Seems like 20%-25% utilization is the sweet spot for me.
Re: cancelling card & effect on utilization . . . if you can, transfer some (if not all) of the credit limit from the card you are cancelling to another card.
What I'm hearing is yes it does drop your score, even if you try your best to minimize it by understanding and properly adjusting your credit utilization and by canceling cards that have an open account life that is less than your average open account life.
I just watched your “credit card collection” video and I was wondering if you can max out 5% categories on THREE freedom cards. It seemed very difficult task, and here you have it! Good decision on cancelling it.
Yep, i can just about do 2, not 3
If you have multiple cards with the same bank you can usually move your credit around. Before you close a card move the credit to another card that way your utilization won't change or it will be very little because cards usually have a Minimum like $500 so you can move it all but that amount before you close it
Good advice I’m looking to close my 300 dollar secured card thru my bank. I have an unsecured card from them too, ill try and ask if i can move that credit.
@@xmateinc Can't hurt to ask but I think that is apples to oranges. Usually they have to stay in the same product category. Give them a call though. You never know. Good luck
I like how the Smart Investment app example has the banks and loans labeled as Gringott's. The Harry Potter bank
im stuck in an old fee card .. old for me and high credit limit - a Barclays Arrival. It pretty much sucks as card. I did use it to enter a Fast lane at an Italian airport recently so there's that. No downgrade path, I checked. I guess Im stuck with it
What microphone are you using Ben? The sound quality is outstanding! )
He’s not telling you
Synchrony just closed 2 of my cards for inactivity lol My Lowes and Newegg cards which I had opened up to make some big purchases. Paid the stuff off and didn't use them for a year. Got emails/letters saying they were closing them due to inactivity and my score dropped like 50 points lol
That's what cardpulse is for. Stash the idle cards and auto charge a buck to keep em active so this doesn't happen!
What if the first two credit card you have is both opened on the same year, just 2 months apart.
But the 1st card has annual fee and the 2nd one doesn't so after 2 years you decide to close the 1st card, will this affect the age of your credit / hurt your score?
2:25 Imagining if I was new to the channel, and I'm like, who is this "Credit Shifu" Ben Hedges is taking about? 😅😅😁😁
thanks ben! big sigh of relief cause this blockfi card has got to go!
I’ve had a Capital One card for almost 5 years. With an annual fee of $59 and with only $300 limit which is garbage. Never got a limit increase on it. In total, I have $40k credit limit on my other cards from other banks that are newer (less than 2 years average age). Is it safe to close the Capital One to avoid the annual fee renewal in July?
I have a capital one card for 17 years but capital one will not increase my credit limit nor a product change . But this is not my oldest card. The problem is this card only got a credit limit of $1150 plus a $59 announcement fee !
My question is will the low credit limit will affect me on my future applying new credit card ? I have other credit cards with way higher credit limit except this capital one card and another capital one but that my oldest card . So should I still keep this card which I don’t think capital one will EVER increase my credit limit or should I cancel this card ?
what happens when you don't close it but the bank does? I have a credit that I didn't used for an year. I had it all paid up on time and this happen.
I have a crappy credit one card with 500 limit but I have total of 35k u think it I cancel this no good card with an annual fee I opened it this year and my score is in high 7’s just got my credit right this year
Hey do you have any information on how to obtain the white card ?
Sorry this happened to you Ben. Still rocking 38 credit cards, 2 years is my longest account age
Wow! You're saying you got 38 cards within two years or that you canceled some older ones?
@@ccb6013 All active!! Most are business for multiple businesses different addresses. 12 personal cards
😮
It's clear how to figure out the average age of one's ACTIVE CREDIT CARD accounts BUT, how do the cards that ARE CLOSED in good condition factor into the AGE of ACCOUNTS, IF AT ALL. Different types of closed accounts show on my reports from all 3 bureaus, yet none of that same information is available on all 3 reports.
Why not pay your card before the statement before the statement closing date
Did your have a strategy behind making this decision? Did you do it just for this video?
*Did you have
Hey I received Amex gold card but I by mistake applied for 2 and I just got them 30 min back... So if I close the unactivated card within 24 hrs does it effect my credit history or credit score ( I wanna remove my 2nd Amex gold card and I didn't even active that carsd yet)
What if I just went to the bank to get a credit card and got approved but when I got home lol and after watching videos now I changed my mind and I rather not get it will my credit get effected if I call and cancel before they even ship it to me ?
I really wanna close my useless BOA travel card i got talked into when i was younger. But its over 6 years old and all my other cards are in the younger phase of like a year and half. But i guess my age is still in the "poor" range (under 4 years i think) no matter. But i still manage to have an 800 score.
Hi, I have a question. I opened an account and it significantly effected all 3 of my credit scores. One was only effect by less than 60 point but the other two were effected by almost 100 point. I was in the 800 range so now I’m pissed. I wanted to just pay off the new account and close. Is that a good idea? Will it help me at least get me close to the 800 range?
dont worry, I just opened my second credit card and my score dropped like 50 points but its because I only have 8 months of history so a new inquiry, less avg age of history dropped it
I closed a secured card and my score went down by 60 points
What happens if you have an Amex Gold or Platinum you no longer want to pay the annual fee for? I wish Amex allowed you to downgrade them to a no annual fee card like Chase does. Best you can do is the Green which is still $150…
Well they are charge cards anyway, so closing them wont hurt credit utilization and on FICO they will still show on your report
Question. If I downgrade a CSP to say, Freedom Flex, would there be a reduction in the credit limit? Or does it stay the same?
Can say that doing this did nothing to my credit limit. They literally keep the same amounts.
@@flipevent - thanks!
My first card was a secured card that was a low limit, 300. My score is 700 now and i got better cards. Should I close that secured card?
I wouldn't...
I've been wanting to close my Credit one card for a while because it's so crappy but it was my first card to help rebuild my credit. It's about 15 years old and my credit varies in mid to upper 700. Ill have to do it one day because I hate the annual fee
Do it ASAP, credit will rise soon with other credit use
Imagine having to rebuild credit
@Jo Llama ya having a first credit card and a first girlfriend at the same time wasn't a good combination lol. That was a long time ago.
Same situation I’m in. I have credit one it’s about 9 years old. They charge me the annual fee by small monthly charges and I hate it cause I don’t want to pay it. I want to cancel it so bad .
Close it!!! I did it's not worth it
At some point I would think that it's conceivable that it could actually be advantageous to close an account, because I'd imagine that there may be a point when you have so many cards or so much credit that you begin to get denied for new cards or get really low credit limits if you get approved. Exactly where that is I'm unsure, but it would seem to me that there's a limit somewhere to how much credits banks collectively want to extend to a given borrower. At that point, it may actually be better to close an old card if you want a new one, I'd imagine.
Can confirm. Multiple cards with Chase. Opened a new one and had a laughably low limit of $500. Called and was told I had about maxed out the credit they were willing to give me. At that point it was over $50k between all cards. Ended up moving limits between cards, as you suggested.
Ughhh I Really want to close my Target credit card because it has a $700 limit they will not raise, but it’s my oldest card at about 7 years old. I do use it for the discount, but I also am a little pissed that 7 years of on time payments hasn’t gotten them to budge.
Keep it open. It's free.
Can anyone tell me why my score was docked 86 points after Chime bank closed my account?
I was scammed out of a house in 2021. I had just made a car payment and told the bank officer to let it through they didn’t. The payment didn’t go through and it lower my credit by 140 points. After having losing 5k to a scammer. I figured credit is bs. Ever since then I said f;$k it. 3 years later I own my house I was going to move from. I piss the car company off by being one payment away from losing my car. They told to file a form and it would take 6 to 8 weeks for reply to fix my credit. No! they will know my name.
i closed my credit 2 co sign credit cards with capital one it went don 9 points
Out of curiosity, why close the card if it has no annual fee? I get not being able to spend. But couldn’t you just sock drawer it?
Then he would have this new content
Eligible for a new sign up bonus. Close a Freedom Flex, for example, and you’d be eligible to earn $200 and 5% on groceries again.
Still kinda confused as to why you’d cancel a no annual fee credit card, and a freedom card to boot.. what’s the advantage other than slightly increasing the average age of accounts?
The advantage is making a new RUclips video about doing it. It’s like a free sign off bonus for cancelling.
@@supreme5998 lol, sign off bonus
So he can make a RUclips video
@@macbeliever 🤣🤣🤣🤣🤣🤣
I somehow applied for a credit One card which was an American Express I think I seen it on the credit karma or whatever it credit karma and thought it was Capital One and American Express for $2,000 and I thought I don't even think anybody takes American Express but apparently I must have hit apply for because I remember my credit score going down but a couple of points because I applied for a card and I thought what the hell I'm an applied for a card All I have is a $500 credit one card or Capital One card and I pay it off every month I put just a little something on it to kind of build my credit cuz I have never used credit cards I'm 61 years old I don't have any bad credit but I didn't have any good either. I mean we have a bank account and I use debit cards but always pay cash for everything or bought it on time. I received a credit one American Express and it wasn't for 2000 it was for $400 and they wanted $75 just to use it but the first thing it says is if you don't accept this card don't activate it or pay any pay the $75 and the account won't be opened well I got that bill I called today and the lady was acting real s***** to me and I said why are you talking to me like this I don't even want the card well mind you applying for it I said it was really a mistake need us to say she put it in there that I closed the card but I'd never opened it well that affect my credit
And with a one with no use?
Wondering why you closed your Freedom credit card since it costs nothing to keep? Unless you wanted to shift the available credit line to another card for more spending available on another card. My wife and I each have the Freedom and Freedom Flex cards (4 total Freedom cards between us) giving us $6,000 of available quarterly spend at the 5 points per dollar rewards. Depending on the category, we will max out these point earnings by "prepaying" for items.
For example, this quarter is Walmart, so before the quarter is up I will max out the $1,500 per card by buying Walmart gift cards to use throughout the year. We spend more than $6,000 per year at Walmart (including groceries). It is important to buy gift cards in store as gift cards are often deemed ineligible for rewards. Online purchases are likely to trigger the purchase as a gift card purchase while in store purchases for me has not. Last year I used this strategy when Rakuten also was offering 5% back for in store Walmart purchases. So I received 5 UR points and 5 MR point per dollar for about $5,000 (I had already spent about $1,000 that quarter at Walmart) of Walmart spend that I was going to do anyway. At a 2 cpp valuation that's 20% back! I'm waiting this year to purchase the gift cards to see if Rakuten does a similar Walmart in store purchase promotion to the one they did last year. We used up the $5,000 of Walmart gift cards we purchased in December last year in July of this year. If you can afford to prepay for expenses like that I think it is worth it.
A couple things to note is that $500 is the most you can put on a gift card, so you'll have to buy up to 3 gift cards for each Freedom card you have. Then the easiest thing is to load those gift cards into Walmart pay and it is really easy to use up that balance. My wife and I (and my kids who do some shopping for us) are all logged into the same Walmart account so we can all use the gift card balances that are in Walmart pay. Walmart pay allows up to 5 gift cards to be loaded at a time. Any returns will have to go back onto a new gift card (they can't add credit to a gift card you already have), so I like to leave a gift card spot or 2 open in Walmart pay for returns (I immediately put the new gift card I get from any return into Walmart Pay) and then always use the gift card that has the lowest balance. You can also use multiple gift cards for any purchase if the purchase is larger than the gift card balance. Hope this helps 🙂
do no annual fee cards automatically close the cards ever if you arent using them ?
Usually not without notice, but it’s still a good idea to make a small purchase on them at least every 4-5 months to avoid any possibility of that.
Always a possibility especially when the economy turns bad and banks feel the risk isn’t worth keeping the card open. Use them at least twice per year.
At a certain point, the difference made is negligible
Can I close $300 opensky unsecured
3:26 "newest" bruh you mean the oldest
Hey,Ben! How bout' Rumble?RUM
I have a few shares, but it really hinges on whether Truth Social gets popular, since Rumble is their cloud services partner
@@TheCreditShifu I have both. Got in a at 6s and 16s. 🤞
Why cancel if theres no annual fee?
For video material
@@TheCreditShifu nice 😂
My uncle who is broke has a 80pt higher credit score than me who is high net worth. Means nothing. Your liquid assets count for loans etc. Credit is for sorry poor people.
Ha he said Credit Shifu
Why close the card if there's no annual fee?
You think that's bad .... I paid off my mortgage recently. And within a month my credit rating dropped like a rock. You'd think that you've proven yourself a reliable borrower after you pay off a mortgage of over $300,000, Ummmmm Nope. Just the opposite.
Same. Paid mine off 5 years early. Score went from 816 to 727. Back up to 763 now
I want to click thumbs up, but I would be number 666 ! 😱😱😂😂😂
enjoy credit. enjoy debt, enjoy hell.
it's crazy because you can feel when you have a high debt.... you sleep like CRAP at night
Payoff your credit cards and close them. FICO is a game to show how much you love debt. You want freedom? Become debt free and stay that way. To each his own.
or play them at their own game and win
@@TheCreditShifu I hear you sir. I'd rather pay cash and play zero games. To each his own.
@@vintagecrazyjay4970 Real talk 💯💯 The best credit score is Zero Balances....Debt free
@@vintagecrazyjay4970 Easy to say when the majority of life people who aren’t rich have to have credit cards for a Credit Score. “Each His Own”
I closed 5 in the last 6 months and i changed nothing on my score
I’ve never used credit cards in my life and never will.
How's your credit score?
Use a debit card, spend $100
Use a basic cash back credit card, spend $98
After like 3 years of everyday pouches you’ll end up saving a ton of money
It feels good to learn about something else other than maxrewards 😁
Haha