Benefits of Keeping Credit Cards Open Over 10 Years

If you have maintained the same credit card for ten years or longer, you may feel a sentimental attachment to it, but there are also compelling financial incentives to continue holding onto it.

While certain drawbacks exist, maintaining credit cards for extended periods is a strategy I strongly advocate, extending beyond mere emotional reasons.

It can improve your credit score

One key aspect you might overlook is that the length of your credit history constitutes 15% of your FICO Score. In essence, the longer you maintain your card accounts active, the more advantageous it becomes for your overall credit profile. The primary objective is to maximize the average age of your accounts as much as feasible.

Additionally, retaining an older card increases your total available credit, which positively influences your credit utilization ratio—a critical component in determining your score.

Should your longstanding card not impose an annual fee, it is generally wise to keep it open. Although it may not dramatically elevate your score, it will provide a meaningful improvement. Individuals boasting perfect credit scores often retain several aged accounts precisely for this purpose, leveraging their longevity to sustain high ratings.

The card can change over time

Credit card offerings evolve continuously, with modifications that can enhance or diminish their value. It is essential to regularly review your current cards for updates in benefits, reward earning structures, terms and conditions, and particularly any alterations to annual fees.

Issuers are required to inform you of significant changes, yet proactive monitoring remains crucial. The most common trigger for closing a card is typically the introduction or hike in an annual fee, or a reduction in perks that no longer offsets such costs. When evaluating and periodically reevaluating your portfolio of cards, factor in these potential shifts to make informed decisions.

The card might not be worth it for you anymore

A full decade represents a substantial timeframe, during which your personal circumstances, income levels, and spending patterns are likely to have transformed significantly. A card that suited your needs over ten years ago may no longer align with your current lifestyle or financial priorities.

For instance, with a higher income, you might benefit from upgrading to a luxury travel card that offers premium rewards. Alternatively, even if your improved credit score qualifies you for superior options, your original card’s rewards and perks could feel outdated and insufficient by comparison.

That said, I still advise keeping the card open whenever possible. However, if it truly adds no value to your financial strategy, closing it could prove to be a prudent choice under the right conditions.

What should you do with your old credit card?

An unjustifiable annual fee invariably stands as the primary justification for parting ways with a long-held credit card, and this rationale is entirely legitimate.

If you opt to close an account, time the action strategically when your credit score is robust and you possess ample available credit from other sources. This minimizes any potential negative impact. As an alternative, consider retaining it for the credit score advantages and added flexibility it offers, or request a downgrade to a version without an annual fee if the issuer provides that option.

By thoughtfully managing older cards, you balance the preservation of credit history benefits against evolving personal needs. Regularly assess whether the card’s rewards, such as cash back, travel points, or other incentives, still match your spending habits. For example, if you now travel frequently, a card with enhanced airline miles might eclipse the utility of your decade-old basic rewards card.

Moreover, issuers sometimes introduce product changes that affect all cardholders, like adjusting redemption values or introducing new restrictions. Staying informed through statements and issuer communications helps you decide if adjustments like fee waivers or benefit enhancements are negotiable.

In terms of credit utilization, older cards with higher limits contribute to a lower overall ratio when you spread spending across multiple accounts. This practice indirectly bolsters your score without requiring active use, as long as you avoid carrying balances.

For those contemplating closure, calculate the potential score dip beforehand using free credit monitoring tools. Aim to close accounts representing less than 10-20% of your total credit to limit fallout. Post-closure, focus on timely payments and low utilization on remaining cards to recover swiftly.

Ultimately, the decision hinges on a personalized financial review, weighing sentimentality against quantifiable benefits like score maintenance and available credit lines.