How do I change credit cards without hurting my credit score?

May 5, 2015 11:42 AM

So I've got several 2-3 credit cards that I use heavily; I never run a balance, none of the cards have annual fees, I just like the convenience and earning rewards. I'd like to switch from the cards I'm using to some new ones that have better rewards, and do it in a way that doesn't hurt my credit score.

I've always heard that closing accounts has some sort of negative effect, and specifically things like "if you've got a credit card you've had for a long time, just keep it rather than close it since its longevity is good for your credit score".

I've had my current cards for 8-10 years. I would rather not just keep them open if I'm switching the bulk of my usage over to new cards, because a) the idea of having a bunch of open accounts that I don't use seems unsafe and sloppy b) to the extent that I have credit available to me, I want it to be on cards that I'm using (ie I don't want my new cards to have a lower limits because I have other unused ones lying around).

In terms of managing my credit score, is there anything I can/should do other than just open the new accounts and close the old ones?

posted by kanuck to Work & Money (15 answers total)

In my experience, you'll get dinged a bit initially for having one more line of credit, but if you keep up your payments, it will come out in the wash within a year or so. I did this about ten years ago, closing a card in the process, and it turned out to be nothing more than a blip, score-wise.
posted by ryanshepard at 11:51 AM on May 5, 2015

I have quite a few credit cards that are defunct. I use them once or twice a year for a tiny purchase, pay the bill, and make a note to repeat the process next year to keep them open. It allows me to have better credit history. YMMV.
posted by Hermione Granger at 11:55 AM on May 5, 2015 [1 favorite]

You REALLY want to keep those accounts open.
You can check for malfeasance and errors on your credit report by pulling a report from one company (TransUnion, Equifax and Experian) every quarter at Annual Credit Report, which is free.

For example:

January 1, pull TransUnion
May 1, pull Equifax
September 1, pull Experian
posted by Major Matt Mason Dixon at 11:56 AM on May 5, 2015 [3 favorites]

"Credit score" is a bit of a misnomer - the organisation that's doing a credit check gets your record, then does their own internal process to decide exactly how they want to do business with you.

Yes, "long-running relationship with a credit provider" is often a plus because it implies a lazy customer who doesn't shop around. But on the other hand, "has lots of lines of credit to call on in an emergency" might be a minus.

Personally I'd keep the cards open, or maybe close the youngest one, but there's no definitive answer.
posted by Leon at 11:56 AM on May 5, 2015

I would keep the oldest card open, if I were you, and ideally set it up with one small annual payment to keep the line of credit going, maybe for a recurring annual membership to something so you don't even have to think about it except to pay the bill once a year.

To the best of my knowledge, if you keep your oldest card, so your credit history will continue to show you've been using credit responsibly for a long time, there's no major reason you couldn't close the second-oldest, third-oldest, etc. if that gives you some peace of mind.
posted by Stacey at 11:59 AM on May 5, 2015 [1 favorite]

Closing credit cards you've had for a long time hurts you because it will reduce the average age of open accounts - one of the factors that the people calculating your credit score look at. Generally the longer you've had accounts open, the better it is for your credit score.

In my experience, it is not likely that your new credit limits will be super-low just because you keep other credit cards open.
posted by Betelgeuse at 11:59 AM on May 5, 2015 [2 favorites]

Are you going to be doing anything soon (buying a house or a car) where it really matters what your credit score is? Is your credit file really thin (not many total accounts, no mix of credit, auto, mortgage)? If the answer is no to both, then just go ahead and get better cards and close the old ones. In a few years you'll have better cards that are a few years old and you'll be fine creditwise.

If your file is thin, just keep your oldest account open and set an autopay on it (card autopays a bill, and then the card is autopaid from your bank account) so you can keep it active without effort. If you're planning on buying a house soon, do that first and THEN switch cards.

My credentials: I have made gaming the credit system sort of a hobby and I just went and counted, I've closed 5 cards this year and opened two. My credit score is still over 800.
posted by rabbitrabbit at 12:16 PM on May 5, 2015 [4 favorites]

Are the new cards issued by the same bank(s)? If yes, you might want to try to call the bank and ask if you can convert the old ones (I believe this is called "product conversion"). You'll probably get a new account number, but the history will remain.
posted by Calloused_Foot at 12:16 PM on May 5, 2015

I'm with rabbirabbit. If your credit score is already good, don't worry about it. If your score is near or over 800, I'd be surprised to hear you turned down for that reason.
posted by cnc at 12:35 PM on May 5, 2015

Just hopping in to say that I successfully upgraded a few of my cards earlier this year by calling up and telling the customer service representative that I'd like to take my regular, basic entry-level card and upgrade it to their fancier card. It took about five minutes, I had no problems, kept the age of my accounts, and didn't get any hard inquiries onto my credit score.

I'd definitely consider doing it again if I needed to switch around any of my other cards for some reason.
posted by PearlRose at 1:19 PM on May 5, 2015 [2 favorites]

Agreed that a product conversion is a good way to solve the problem, if the cards you want are issued by the same bank as the cards you have. Chase, Citi, and Bank of America will usually do conversions; I haven't had luck with conversions with American Express and Barclaycard.
posted by rabbitrabbit at 1:28 PM on May 5, 2015

Don't close the cards you don't use. Having the cards in good standing over the long-term looks good. Closing the accounts offers no benefit that I am aware of. You get dinged when you open new credit cards, but eventually once your lines of credit are stable it will be fine as long as you're not delinquent.

I have a couple credit cards AND a bank account I forgot I had, and they've never been used. I got my free credit reports recently and those accounts didn't hurt me at all, and seemed like maybe they looked positive.
posted by AppleTurnover at 2:51 PM on May 5, 2015

One good reason to close any accounts that you don't use regularly is that some credit card companies CONSTANTLY send balance transfer "checks" that can be stolen from your mailbox and used fraudulently.
posted by rabbitrabbit at 3:01 PM on May 5, 2015

Lots of good advice above about not closing your current accounts (as long as there are no annual fees). If you're going to open multiple new accounts, try to do it all within a week. If you have all the hard pulls on your account within a few days, they are all treated as one credit check and don't affect your credit score as much.
posted by karbonokapi at 4:55 PM on May 5, 2015

This is not true for credit cards, it's only true for auto loans or mortgages, when you're almost certain to only open one loan for multiple inquiries (when you're shopping around for the best rate). Credit card pulls will all affect your credit score regardless of how close they are to each other, since you can easily wind up with one credit card per inquiry.
posted by rabbitrabbit at 8:58 AM on May 6, 2015