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I’ve opened a handful of credit cards over the years — but I’ve never closed a single one. And that’s not just because I’m a sentimental guy.
It’s not because I love managing a bunch of different accounts, either. It’s because keeping old cards open can quietly strengthen your credit score — and overall finances — in a big way.
Here’s why I’ve never closed a credit card in my life.
It boosts my credit age
One of the more underrated parts of your credit is your length of credit history. It makes up 15% of your FICO® Score, and includes:
- The age of your oldest account
- The age of your newest account
- The average age of all your accounts
When you close a credit card, especially an older one, you’re lowering your average account age. That can hurt your score by a decent bit.
By keeping all my cards open, I can preserve my oldest account, keep my average age high, and show lenders a long track record of good credit.
Just like in real relationships, trust with lenders and the credit bureaus is built over time. The longer your credit history, the more reason lenders have to trust you.
Ready to see what you can unlock with an elite credit score? Check out our list of the very best credit cards available today.
It lowers my credit utilization
Another factor in your score: Credit utilization — how much of your available credit you’re actually using.
Let’s say you have:
- $10,000 in total credit limits
- $2,000 in balances
That makes for a 20% utilization rate. Pretty solid.
But let’s say you close a card with a $5,000 limit. Now, your total available credit drops to $5,000. Now that same $2,000 balance makes for a 40% utilization rate — not as strong in the eyes of lenders.
Simply put, keeping old cards open gives you more total available credit, which helps your utilization ratio. You can even contact your issuer and ask for an increase to your credit limit — and if you’ve owned the card for a while, they’re more likely to give it to you.
It costs me nothing
All of my credit cards have no annual fee — yes, I’m one of those people. I don’t like the idea of having to use perks to justify the cost of a card.
There’s a clear benefit to getting no-annual-fee cards, though: There’s practically no downside to keeping them open forever.
You don’t need to use them often, either. Just make a small purchase every few months (and don’t forget to pay it off).
That keeps that account active, preserves any rewards you might have, and helps your credit without costing you a dime.
Does it ever make sense to close a card?
On the flip there, there are a few times when closing a card can make total sense. That’s especially the case if you:
- Are paying an annual fee you can’t justify
- Are tempted to overspend on a card
- Think you might forget to use perks or pay off your balance
In most cases, though, especially with no-annual-fee cards, keeping it open is the better move. You’ll hold onto rewards and boost your credit score — and (maybe) not have to pay a thing to do it.
Want to land a credit card you can keep for the long haul? See our list of the best no-annual-fee credit cards out now to start saving.
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