Quick Answer: In most cases, keeping old credit cards open is beneficial for your credit score and financial flexibility. However, the decision should be based on factors like annual fees, rewards value, and your spending habits.
Pros of Keeping Old Credit Cards Open
- Credit Score Benefits: Maintains length of credit history and improves credit utilization ratio
- Emergency Access: Provides backup credit line for unexpected expenses
- Rewards and Benefits: May offer valuable perks like travel insurance or cash back
- Account History: Preserves positive payment history on your credit report
Cons of Keeping Old Credit Cards Open
- Annual Fees: May need to pay recurring fees for cards you rarely use
- Account Maintenance: Requires monitoring for fraud and unauthorized charges
- Temptation to Overspend: Having available credit might lead to unnecessary purchases
- Risk of Inactivity Closure: Cards may be closed by issuers if not used regularly
Key Considerations Before Making a Decision
Annual Fees and Rewards
Evaluate whether the card's benefits justify its annual fee:
- Calculate the value of rewards earned vs. annual fee cost
- Consider if there's a no-annual-fee version available
- Check if rewards categories align with current spending habits
Pro Tip: If a card has an annual fee but you want to keep it for credit score benefits, call the issuer to see if they'll waive the fee or downgrade to a no-fee version.
Credit Score Impact
Understanding how closing the card affects your credit:
- Impact on credit utilization ratio
- Effect on length of credit history
- Influence on credit mix
Learn more about how inactive cards affect your credit score in our detailed guide: How Inactive Cards Affect Your Credit Score
When to Keep Your Card Open
- It's your oldest credit card (important for credit history length)
- The card has no annual fee
- You use the card's benefits regularly
- It helps maintain a low credit utilization ratio
- You have a positive history with the card
When to Consider Closing
- High annual fee that isn't offset by benefits
- You have too many cards to manage effectively
- The card offers minimal value compared to your other cards
- You're struggling with debt and need to reduce credit access
Important: Before closing any credit card, make sure you understand the potential impact on your credit score and overall financial situation.
Maintaining Inactive Cards
If you decide to keep the card open, consider these maintenance strategies:
- Make small recurring charges (streaming services, utilities)
- Set up automatic payments to avoid missed payments
- Review statements regularly for unauthorized charges
- Update contact information with the issuer
Need help keeping your card active? Our service can help with small, automatic charges to prevent account closure.