Why you should CANCEL your old credit cards

No video

Why you should CANCEL your old credit cards

Рет қаралды 103,561

John Liang

Күн бұрын

Пікірлер: 212

@BradleyHansonPhotography Жыл бұрын

OMG. I've had credit cards for almost 40 years and I didn't know closing a card was so painless. THANK YOU for helping me declutter my life...

@SpencerJohnsonOfficial 2 жыл бұрын

That was a great explanation of what closing a credit card actually does to your credit. I have always been so scared to close my cards, but this video made it sound a lot less scary than most people make it out to be. Thanks John!

@MoneyMelJr Жыл бұрын

You should not close your old Credit Cards if they're in good standing with over 5 years of history.

@SpencerJohnsonOfficial Жыл бұрын

@@MoneyMelJr It definitely depends on the case, but I don’t plan on closing any cards with no annual fee. And if I can downgrade to a no annual fee version, even better!

@mikeyoung7640 9 ай бұрын

@@MoneyMelJrit can be hard to manage a bunch of card which will make sense to do so

@EaglesQuestions 7 ай бұрын

@@MoneyMelJrThis advice would leave me paying the $50/yr fee forever, on a no-longer-used card from my college days, just to avoid negative credit effects.

@sir_gil 4 ай бұрын

@@MoneyMelJrquestion what should I do if I opened a card in 2013 without realizing it and never used it

@g3ner1c 2 жыл бұрын

I'm Filipino and that intro "shhht" made me look really fast at the screen. Great content as always!

@Gumbayan 2 жыл бұрын

same 😂

@daniyoh 2 жыл бұрын

lol

@johnsfinancetips 2 жыл бұрын

haha that's so funny! I had no idea that was a thing!! Are you in the Philippines currently? It's literally one of my favorite places in the world!!

@santibanez91 Жыл бұрын

Filipino or Filipino-American?

@jackfrost99 28 күн бұрын

@@johnsfinancetips Closing an account will decrease your credit score. I paid off my Toyota car loan and my score dropped 30 points. Had nothing to do with credit card utilization.

@CamdynRasque Жыл бұрын

Never considered that too high of a high credit limit could be an issue, TIL. Great video!

@wil_L Жыл бұрын

Great video, I learned something new! I'm of the opinion of keeping your credit cards open to keep the credit utilization low. Other than risks of fraud, I had no idea about being rejected for having too much credit.

@FriendlyNeighborhoodNitpicker 2 жыл бұрын

Be warned that this does not always happen at all three bureaus. I have a closed American Express account. It used to report to all the bureaus, but sometime after I closed it, I didn’t notice how long it took, it stopped reporting to most of them. Now it only reports to Experian. So I lost that age on the other major bureaus. And of course since it’s a closed account there’s nothing I can do about that.

@johnsfinancetips 2 жыл бұрын

Thank you for the heads up! That is something I think you should ask AMEX about since they shouldn't have scrubbed that history - it should be marked "closed" on your report.

@martin4819 Жыл бұрын

I agree be warned . I was piggybacked/authorized user on my parents USAA visa CC since I was 21. Never used it but they did it to help my score. Fast forward 30 yrs and they wanted to close that card and did so a year ago. Transunion still shows it but equifax doesn’t, which dropped my age down about 15 yrs. I went from excellent to bad for “age”. Oddly my TransUnion Score is only a point different than Equifax….which is usually the case…they are always about the same. I dont worry too much about utilization outside of my ability to pay my balance in full. Which of course I always do ;). If I’m going to need a loan or whatever I just pay twice a month or someone could just not use their card for the month or two.

@DianeCrystal 5 ай бұрын

I like this because I’m definitely going to be paying off and closing some of my newer cards but I’ve always been scared to do so until now. Thank you!! ❤

@Jammin1288 Жыл бұрын

My mom put me down as an authorized user on a department store card she had for decades. A few years later the store went out of business. The card is still on my credit score at least in age so it shows my age of credit is older than I am.

@MisSaLiMaRi3 5 ай бұрын

Wow that’s insane. Can you dispute that?

@allisonmuench4218 Жыл бұрын

thank you for making such great videos!! i love that you don't talk too fast and you type out when youre talking numbers and equations. Thanks!! best finance videos ever!

@GeorgeAdamsIV 2 жыл бұрын

You forgot the most important strategy… let’s say you have more than one chase card… you can call to “merge” the cards from one to the other which will combine the credit limits and effectively close the old card out…. This shows as more positive on the credit report overall and maintains your credit limit. Also your comment on chase max credit line is true but they will let you continue to open more cards… they will just decrease limits on other cards to make up for the new card limit so you retain the same overall credit limit.

@VincentPascual 2 жыл бұрын

Does Amex in the US let you do this as well?

@Psi-Storm 2 жыл бұрын

But if you merge them, you still lose out on the average age of your cards in the long run. It's usually better to convert the cards, if the new product doesn't come with a large sign up bonus.

@sotonin Жыл бұрын

@@Psi-Storm when you convert a card "product change" as chase calls it, you get no signup bonus

@Psi-Storm Жыл бұрын

@@sotonin You sign up for a premium card, get the bonus/year and then change the card to a free version.

@hannahelizanoel Жыл бұрын

Thank you so much for giving me the last little boost the cancel 2 of my credit cards. My credit score didn’t take a hit :D

@ruffrider97 Жыл бұрын

thank you because I was scared to close my First Premier cards. they are Horrible! but after this video I'm calling NOW!!

@toughguy8228 7 ай бұрын

I have heard keep your utilization below 10% which is what I strive to do. Great video, thanks for clearing some stuff up for me

@davidpham9353 Жыл бұрын

As a former banker, I actually laugh at people who are easily got fooled by believing this video. Go google and confirm yourself before messing your score up.

@tyangchizzle Жыл бұрын

Ok. I'm pretty knowledgeable on credit cards and such, but the one thing I didn't know was that a closed account stays on your credit report for 10 years from closure. I always wondered and now have my answer. Great content! 💪😀🔥

@JoelNCurry Жыл бұрын

The hard part is getting companies to close your account when you go through the retention department.

@patriciafears5278 20 күн бұрын

Thank you so much. Closing a card right now.

@nazirsafi9836 11 ай бұрын

Simple, and to the point! Incredible!

@yvr2002rtw 2 жыл бұрын

AMEX in Canada lets you transfer your credit limit from one credit card (not charge card) to another. Once this is done, you can cancel the card with the low limit.

@johnsfinancetips 2 жыл бұрын

thanks for the share!

@diegosegura7617 Жыл бұрын

Is it only between Amex cards, or can you transfer from other companies?

@jeromehenry4484 Жыл бұрын

@@diegosegura7617 There are two types of "transfer": 1.) Balance Transfers: maybe you want to consolidate multiple cards with high interest rates to a new card with a 12 - 18 months Introductory APR of 0%. That type of transfer MUST BE DONE by having a totaling different credit card issuer. 2.) Re-allocation of Credit Limits: you have a Chase Trifecta (3 cards), but one of the cards is used sparingly, and another is used frequently & utilization is high (nearing 30%). You can take half of credit limit from spare card and transfer it to high use card, which will reduce your utilization rate on high use card. Obviously, this is the same card issuer. Hope this helps.

@SixDogsMusic Жыл бұрын

I called chase and they also allow moving partial credit line to another card

@fogrunr5075 Жыл бұрын

My total credit line was 125% of my gross annual income when I was approved for the Chase Sapphire Preferred.

@jeffreygodsey6516 Ай бұрын

Here's what I learned today credit card companies can cancel credit cards if you're a seasonal user under the caption inactivity the law was changed in 2008 if the credit card company consider your card not active enough they can can cancel you with the excuse inactivity and it perfectly legal, one more thing it does effect your overall credit score if you cancel or if they cancel you research it does effect your credit rating

@jordanhightower1766 4 күн бұрын

Appreciate the breakdown 💯

@callmeNeno 2 жыл бұрын

I recently closed my Apple Card three weeks ago MyFICO score dropped only 1pts for closing it. I closed two cards last month . If a card doesn’t bring you any value, just closed them and avoid any chance of fraudulent charges etc

@johnsfinancetips 2 жыл бұрын

That's exactly it!! Thanks for sharing this data point as well! Haha you know how I feel about the apple card 😂

@johnsfinancetips 2 жыл бұрын

@Vanessa Campbell (Credit Counseling Consultant) Thanks for the comment Vanessa as someone who has accumulated over 4M credit card points and miles I also have a really good idea on how to make them work for me. As always my videos are free so please feel free to continue watching!

@mdudegamer9765 2 жыл бұрын

👍

@Aeisree 8 ай бұрын

Wow, such a great and simple explanation about closing a card. Thank you! fantastic job!

@parischulo4353 Жыл бұрын

I just learned a lot of new information from this video and I just wanted to say thank you for that amazing explanation and thank you for further augmenting my knowledge with credit. Amazing video ❤

@francis5944 Жыл бұрын

you are one smart dude John, I wish I had a brother like you.

@mikeymex_kinda 3 ай бұрын

This may be the best video you’ve made!

@MoneyMelJr Жыл бұрын

1) When you close a credit card that is in good standing it does not sit on your Credit Report reporting as positive towards your Credit Score. 2) When you close the Credit Card it is on your report, but it is not reporting actively towards your Credit Score. 3) Once your Credit Card is close 45 days from closing it will affect your score just as much as it positively impacted it. 4) I like you John, but I have to create a video addressing this brother.

@johnnymann7929 Жыл бұрын

@John Thanks for clarifying “late payments” and what actually qualifies as a late payment on the credit report.

@terrierislander1 Жыл бұрын

Utilization under 30% is good, under 9% is excellent according to credit bureaus...

@leeuniverse 2 жыл бұрын

This just isn't true... The "Age" calculation primarily focuses on OPEN accounts thus it's absolutely true you SHOULD NOT close older cards until you've had the newer ones for at least 10 years. It's the same with getting new cards... I had 3 cards each for over 3 years, and my just showing ONE of several of the cards I got caused me to lose around ONE YEAR of my credit Age. Then when the others cards show up on my credit report my credit age is going to be down to ZERO which is going to hurt my score alot. Of course, in time those cards and otherwise will benefit my score more, but that hit IS still there, and it's going to take some time to get out of it.

@Tony36847 2 жыл бұрын

Much better info than the video

@yoadrian9808 4 ай бұрын

People worry so much about credit score I use credit cards to my advantage never carry balance on interest cards but don’t mind caring a balance on 0% cards

@justinwilson2014 11 ай бұрын

Good info…keep up the good work/content👏🏽!!

@ahsans5350 Ай бұрын

The beginning 💯

@melb.975 Жыл бұрын

Wow!! Thats super valuable information!!!

@cristinan600 Жыл бұрын

Wow thank you for explaining this !!! ❤❤❤

@alextitov1416 Жыл бұрын

Great finance tips John!

@xyzzy64 Жыл бұрын

After this video, I still believe that you should never close your first credit card. 10 years down the line, it's going to really hurt your credit score when a couple years suddenly go missing from your credit age for a choice you made 10 years prior

@jeffreycardoza8983 9 ай бұрын

make sure you buy a house before 10 years lol

@jdkay1390 Жыл бұрын

Great explanation

@adawg2059 Жыл бұрын

Good to know. Before jumping the actual ins and outs of this game, I closed my oldest card. It had an AF and I never used it. Glad it won't burn me.

@kingrichard_1093 Жыл бұрын

I have $65k in credit limit and closed 3 accounts. Currently at $49k credit limit.

@FinanceConsumer 4 ай бұрын

close the ones that u recently got and keep the balance 0 and owe nothing and then close them and keep the very old one that you have

@dlbui 2 жыл бұрын

Really great explanation!

@johnsfinancetips 2 жыл бұрын

thank you! appreciate the support

@tonygrace3435 2 жыл бұрын

Thank you so much! A pure genius!

@bryanleon1584 Жыл бұрын

great value video. thanks!

@terrellleister4207 Жыл бұрын

Thank you for this very much will said

@Danyang1 8 ай бұрын

Thank you so much for your content! It helps soooo much!

@dominicmansah2767 Жыл бұрын

I love you bro I needed this imma close my cards cause I’m just not good with credit

@neilzambrano3557 2 жыл бұрын

GREAT video John, could you do a video on the best checking/savings account to have thank you and keep up the good work!

@francescaplowright975 5 ай бұрын

Just THANK YOU 🙏

@edwardboland-fp9en 14 күн бұрын

Wtf we talking bout because I canceled my card with a paid off balance and my score dropped 117 pts?

@terrierislander1 Жыл бұрын

Some agencies and banks don't include closed accounts in average age of credit some do.

@sylviasosa2215 Жыл бұрын

Thank you for this helpful information.

@Beignetboy Жыл бұрын

just closed out my account, my score dropped 40 points, what the f***!!

@JR-wj9it Жыл бұрын

Ohh snaP, for relz?

@paulstevens1493 Жыл бұрын

Okay, but if you close a card, I assume that its credit history does not keep growing, right? So let’s say you close a card that’s two years old, it stays “two years old” for the next 10 years? This seems like it would bring down your average credit age if you have mostly accounts that are older than 2 years.

@coolti44 Жыл бұрын

I just opened another 0 interest card. I have no balance on it and the limit is $22K. I didn't read the fine print for a balance transfer. They want to charge me 5% but the customer service rep said the going rate is 3%. I have exceptional credit; why am I not getting that rate. I wanna close it. Thanks!

@yoadrian9808 4 ай бұрын

Example I needed tools for work I looked for a card to help US Bank gave me 200 for spending 1000 my tools cost me 1300 plus 1% cash back it’s like I only paid $1087 and 18 months no interest. Allows me to carry cash if I ever had a emergency I can always pay minimum only in emergencies but I always pay off

@Rbar-s6q Ай бұрын

Great job!

@afridgetoofar1818 2 жыл бұрын

Thanks for the info. I’m about to cancel my Chase Freedom card.

@marissanicole8997 2 жыл бұрын

Hi John! It was just announced that my Ebates Cashback card is being discontinued in September of this year. I will have my balance paid off before then, but I wasn’t sure if you recommended calling to close the account before this date or if when a card is completely discontinued it is better to let it close in good standing on its own? I can’t find any info on this online so if you have a tip, I will take it!

@zacharydial941 3 ай бұрын

But what happens in 10 years when that account falls off your history?

@Gabrielledu7 2 жыл бұрын

Hello John really good video. Now my question is what happen when my credit card doesn’t have a limit? What will be my top of utilization?

@Psi-Storm 2 жыл бұрын

Charge cards like the Amex Gold/Plat don't affect utilization, so you can't improve your utilization score with them, but this can also be good, because they don't tank your score if you for example have high business expenses in a month.

@HabibTheHeeb 15 күн бұрын

I just closed 4 card. If it was costing me any type of money I closed it.

@theboiichris 2 жыл бұрын

Great Video!

@johnsfinancetips 2 жыл бұрын

Thank you!

@LilDarren1992 Жыл бұрын

There’s a portion of this video that can be seen as misleading. Closing a card u had for a long time will definitely have a significant negative impact on your score… Any account that’s closed will have a negative impact. A closed account means it’s no longer active, meaning there’s no benefit. Im sure u know that.

@TruueFlo_ Жыл бұрын

John Do you think it’s a good idea to close a starter card after one year and graduate to the CO Quicksilver?

@nnou2514 Жыл бұрын

Great content thank you but... I did have a card that got canceled (while in good standard) when I was younger because I had not used it in a while, and even though the credit utilization is a good explanation to my credit drop at the time, i could still see the average age dropping on my credit karma app...Should have I not had the same average age for another 10 years ? Or is my actual credit higher than displayed on my app ? Thanks !

@couz96797 Жыл бұрын

The only reason I wanna cancel my credit card is the high annual fee. Already tried to inquire about downgrading or product switch but Barclay said no. 😢

@AbbyBrockman Жыл бұрын

Hi John- late comment here but quick question! You said that closing a credit card doesn't impact your length of history because it stays on your credit report for 10 years. But let's say someone has a 15 year old card that they close. Sure, it doesn't affect their length of history when they close it right then...or for the next ten years...but once ten years has passed won't it then register and cut their credit history by those 15 years? Sure it'll take 10 years to feel the ding but depending on your age wouldn't that be significant?

@britneyveney8813 7 ай бұрын

Good question 🤔

@davixmoses5548 11 ай бұрын

So have maxed 4 of my cc, and now I paid of 2 off them in full, am thinking og closing those, was the best advice

@naparqalria Жыл бұрын

from my understanding, average age of credit is on active accounts. I’m basing it on my own experience because when I closed an acct on the average length on my report, there was a big dip on average age. so if average age was on all accts, my drop would not be that different.

@wealthbytes Жыл бұрын

Yes, it's on active accounts. Closed, especially if it's one that has been open for 10+ years will impact your score. This is even talked about on Equifax. It not only affects your credit utilization and length if you had a card open for a long time.

@kevins5340 2 жыл бұрын

So if you cancel a charge card like the Amex gold or platinum it would technically not hurt your credit since there’s no credit limit?

@juliovelasquez9286 2 жыл бұрын

Correct

@andrewriedler2665 Жыл бұрын

What’s that mean?

@adieognira9709 Жыл бұрын

it was a great explanation. just a question though, you mentioned that "when you close a credit card in good condition it will stay for 10 years". this is good but what happens after the 10 years? usually, mortgage takes more than 10 years as an example. this means that my renewal will be impacted because I am losing that 10 years of good credit history?

@Vyce611 Жыл бұрын

The 15%, my CS drop close to 807.

@Messydep Жыл бұрын

I love you. Thank you so much 😂

@ReeceReviews19 2 жыл бұрын

Awesome video

@Ojallo Жыл бұрын

i have a sapphire card with over 17k limit I opened in may i want to cancel it because I don't like their no annual fee options and i don't need it i put all my expenses on my amex card i will maybe go for the apple card for the security and no forgin transaction fee but what are your thoughts ?. I don't like having a lot of cards because i don't need them

@NathSchultzUK 5 ай бұрын

Best video ever!

@jakeizlove Жыл бұрын

Thanks!!

@EvanHerlihy 2 жыл бұрын

So if I apply for the new card I want to optimize utilization, and then cancel my old one, is that a good strategy?

@Ajjiworld-xl6ck Жыл бұрын

Thorough 👏 👏

@scottivlow9962 Жыл бұрын

I thought 90% of all credit card users cancelled a card that it wasn't bonuses it's because of the high annual fees they would be paying on a card they don't use. I can't figure why annual fees aren't the number one reason why people cancel credit cards. American Express has the highest annual fee credit cards but so more cards you have at over $500 are going to get cancelled after a while.

@CrypticCobra Жыл бұрын

Because most normal cards don't have annual fees, once you get out of "normal" cards and start shopping for cards with extra bonuses and sign-up bonuses, they are expected to have annual fees. These cards ARE good to close out and hop from card to card once you get your bonuses. The thing is, it's not 90% of people doing this... it's less than 5%. Most people use credit cards wrong, build up credit card debt and never even qualify for those higher-tier cards Some people use cards correctly, pay them all off, but are not interested in juggling credit deals and constantly moving their money around. A few people are willing and interested in putting the time and effort into "playing the credit card game" and jumping ship every time they get a deal/ find a better one. These people btw often spend WAY more than they need to hunting sign-up bonuses. Sure they saved a few hundred... but they spent 3x more than they would have otherwise. $200 saved doesn't mean much when you are left with $500 spent on frivolous regrets.

@EthanPatrick_CreditCards Жыл бұрын

Great video John. Your growth on KZfaq has been crazy and inspiring. Thanks for the simple explanation!

@LadiGraphx Жыл бұрын

This was great. But my questions is all of my cards are in good standing paid off. But I have 2 that I don’t use but there’s a monthly fee! So I’m considering closing it

@wtopp345985 Ай бұрын

What happens if I go to cash only? What happens if I only use debit cards?

@DylanSmith-fl4fs 4 ай бұрын

So if I have a card with a $700 credit limit and another $2,300 between 3 other cards, the $700 is charging me a monthly usage fee (First Premier), and I've only had it for 6 months (and got approved for the other 3 cards since opening the F.P. card), should I cancel it? My credit is higher now than it was before, and I've been paying off all my cards before the Statement Due date. I feel like it SHOULD be safe to close it, but I'd like some confirmation.

@stevec9669 4 ай бұрын

I have a credit card with a credit limit of 10K. My wife has another card with limit of 8K and I am an authorized user of that card. Is my credit limit 10K or 18K in Chase's view?

@aaden4888 Жыл бұрын

So my utilization is high, and I’m in the beginner tier of one of your recent videos. Would getting another card lower that?

@danieldoria4519 Жыл бұрын

I’m finding out her videos telling me different? Who do I believe!?! Also, what is your source on the cards staying on my score 10 years after I close them??

@princearthur4946 Жыл бұрын

Dude, you will gain far more audience if you just go straight to the point in each video you produce.

@davidpham9353 Жыл бұрын

the longer he tries to make the video, aka the more useless part, the more he got paid for money.

@korruptcontent954 Жыл бұрын

You can accidentally close your first card like I did! And it shorten my credit age by like 8 months! That one hit my credit pretty hard! My credit age at the time was only a year and 8 months and it took 8 months off of my credit age! It was a secured card I started with and I just wanted to cancel it and get my deposit back since I started getting real credit cards

@santiisf Жыл бұрын

are you sure it didn’t lower your credit because of the new utilization and not the credit history

@korruptcontent954 Жыл бұрын

@@santiisf yea man I looked over everything even after the cancellation I only had a 12% utilization. And I got hit for like 30 points.

@santiisf Жыл бұрын

@@korruptcontent954 that’s crazy, looking to cancel my secured card as well but if it hits hard i rather just continue to pay for it

@korruptcontent954 Жыл бұрын

Ask around this was in 2019. Also I was able get it back up pretty fkn quick! I just kept the balances low and paid them off in full every month for a couple of months.

@LookAtLilDude Жыл бұрын

@@korruptcontent954 30pts aint shit get tha back with a nee credit card

@GungHoSourdough 10 ай бұрын

I’ve had and been using a Cabela’s Club credit card, would it be best to pay off the $1200 remaining debt and then cancel it to open a better one? Or should we keep it open and get another one

@55ting55 6 ай бұрын

My question is what will happen when that 10 years arrive? For example I have 2 cards Amex and Visa, just for example. I has the Amex for 20 years and the Visa for 10 years. Hence, my average age of credit is 15 years (20+10)/2. Now, If I close the AMEX, and as you said it will be there for another 10 years. At the time that 10 years arrive, What is my average age of credit, 20? If I did not close the Amex then at the same time my average age will be 25 years (30+20)/2. Am I understand it correctly?

@billwright2176 Жыл бұрын

How does being a AU with a higher credit line effect your ability to get more of your own credit.

@Killer_Kurt Жыл бұрын

Any sources that confirm this claim? (That the card is reported for 10 years after close) Like from the credit bureaus or something? How do you know this information?

@TamerRashdan 2 жыл бұрын

Eye opening

@MikeCovert14 Жыл бұрын

Maybe a stupid question but using the camera lens analogy. If you purchase that $2000 lens and then pay all or most of it off before you get your statement. Will your credit utilization still stay at 20% or will it go back to 0% or whatever balance you still have on the card?

@HuttyTheKid Жыл бұрын

I got my first credit card 8 years ago and I just got my second credit card this year. If I cancelled the old card, that would mean that it would subtract 8 years from my length of credit card history, even 10 years later, correct? Is it worth keeping my oldest credit card in this case, especially if I want to have a lot of cards in the future?

@winhtin3420 2 жыл бұрын

That was very informative. Question. If you have a credit card and a supplementary card is issued for that specific card, will the credit limit still be exclusive to your credit limit score? I assume it is. Thanks!!

@citlallyramirez3548 5 ай бұрын

Question. I have a cash rewards cards Bank of America. I’ve had it for 6 years. I have a $2,456 balance and a $7,000 limit on it (I’ve had the balance for a long time but i always paid the minimum payments on time) I now have the money to pay it off. I want to get rid of the card because it’s not giving good rewards and it’s it got a $60 annual fee. I’d like to apply for a better one but don’t want it tanking my average score. What’s the best way to go about doing that?