# Does cancelling credit card affect credit rating



## christinad (Apr 30, 2013)

I'm wondering if cancelling a credit card will affect credit rating. It isn't my oldest card but according to american sites it d
affects it. Does anyone know?


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## christinad (Apr 30, 2013)

I found this on transunion:

http://www.transunion.ca/ca/personal/consumersupport/faq/score_en.page

So, it sounds like it still may affect my credit score if I cancel and get a new card. : - (


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## brad (May 22, 2009)

Yes, it might affect your rating, but the question is whether it effects your rating enough to matter.

I've cancelled at least 10 credit cards over the past 30 years, but lenders have always told me I had a great credit rating. The transunion site is a little misleading (they're in the business of selling credit reports, so they want to breed paranoia and anxiety around this); they say "the higher the better" for credit scores, but most lenders use thresholds: if you're above this score, you're low risk, if you're below that score, you're high risk. It doesn't matter if you're only 2 points above the threshold or 20 points above the threshold -- what matters is that you're above the threshold.


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## alingva (Aug 17, 2013)

Here is how credit history works


Yes, it does affect your credit rating, your score goes down. Not a big deal if you have good credit history


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## carverman (Nov 8, 2010)

alingva said:


> Here is how credit history works
> 
> 
> Yes, it does affect your credit rating, your score goes down. Not a big deal if you have good credit history


I've cancelled a few unused CC or credit cards that I no longer wanted to use. They had no money owing on them over the years. No big deal. 

I've also downgraded my LOC max credit available from $20k down to $5K.last year. 
My bank advised me that they will advise Equifax on the downgrading of available credit..Standard procedure..nothing to worry about...
...unless of course you owe money on the CC, or other bank loans and fail to make payments.


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## christinad (Apr 30, 2013)

Thanks for the replies. I have excellent credit but i'm just 9 points into that range so i'm concerned about it dropping. I did have 2 late payments in 2007 so it should rise once that is removed. I also read that you shouldn't leave a card dormant so I may use my oldest card occasionally.


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## carverman (Nov 8, 2010)

christinad said:


> Thanks for the replies. I have excellent credit but i'm just 9 points into that range so i'm concerned about it dropping. I did have 2 late payments in 2007 so it should rise once that is removed. I also read that you shouldn't leave a card dormant so I may use my oldest card occasionally.


If you haven't used a credit card in the last year. CANCEL IT and get verification by regular mail that it is cancelled. Do NOT leave it dormant..it's a target for (possible) fraud 
and some credit card companies could have their credit card numbers stolen or compromised. 

Rule of thumb on CC: If you don't use it, then you don't need it.


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## Westerncanada (Nov 11, 2013)

carverman said:


> If you haven't used a credit card in the last year. CANCEL IT and get verification by regular mail that it is cancelled. Do NOT leave it dormant..it's a target for (possible) fraud
> and some credit card companies could have their credit card numbers stolen or compromised.
> 
> Rule of thumb on CC: If you don't use it, then you don't need it.


If I can please encourage you do to one thing... check your credit score as well post cancelling it.. I have been a faithful TD customer, and over the years I have switched cards several times with new products or if my old card expired etc.. and I caught one (shame on me for not checking it regularly) that had been on my report for two years even though the card number was changed with an expired card.. glitch kept reporting that card to the agencies at a balance of 90% of the available credit...

Needless to say this pounded my credit rating down for two years before i caught it, and it took me literally 6 months of fighting to get it off my report via trans union and TD bank trying to get them to adjust it. 

The positive of this experience for me was that now I subscribe monthly to Trans Union and keep a very close on my credit score until it's completely healed to where I want to be!


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## christinad (Apr 30, 2013)

Do you know if you can switch without cancelling? This would solve my problem as I want to get rid of my td platinum visa. I could replace it with the td classic travel visa.


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## Westerncanada (Nov 11, 2013)

christinad said:


> Do you know if you can switch without cancelling? This would solve my problem as I want to get rid of my td platinum visa. I could replace it with the td classic travel visa.


Absolutely you can.. if you switch in-house with TD, they wont even run a credit check so it's zero impact.. 

but as I said.. make 1000% sure they remove the old card from your credit score.. they didnt for me, but kept the balance on there for some unknown reason! 

I'd advise to pull your score 1.5 months after switching cards just to be sure!


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## Westerncanada (Nov 11, 2013)

Westerncanada said:


> Absolutely you can.. if you switch in-house with TD, they wont even run a credit check so it's zero impact..
> 
> but as I said.. make 1000% sure they remove the old card from your credit score.. they didnt for me, but kept the balance on there for some unknown reason!
> 
> I'd advise to pull your score 1.5 months after switching cards just to be sure!




Why the Classic Travel? 

The First Rewards infinite is far superior..


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## christinad (Apr 30, 2013)

I don't like maintaining the $5000.00 in my chequing account to get it free. I plan to get a $4000 tfsa gic and then I can make interest that way.


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## Nemo2 (Mar 1, 2012)

christinad said:


> I don't like maintaining the $5000.00 in my chequing account to get it free. I plan to get a $4000 tfsa gic and then I can make interest that way.


Did you factor in all the other applicable chargeable bank fees that are waived when you carry the $5K balance, and calculate how much interest you'd have to make in order to offset them? More than you'll make on a GIC I'd think........Plus, if I were you, (which I realize I'm not), I'd consider that money going into a TFSA should perhaps stay there and accumulate, rather than being withdrawn.


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## christinad (Apr 30, 2013)

I was planning to get the TD minimum account which is free if you keep $1500 balance, however I may eventually switch to the pc financial account so I can have a minimum balance. Maintaining a 5000 balance just irks me. I would keep the tfsa - I plan to go to the Maritimes in 20 years and i'd save it for that so I would get compound interest. The amount of money I save is only about $50.00 a year which isn't a lot but I guess that does accumulate over the years. I don't know why keeping $5000 irks me but it does. Ultimately, i'd like to switch to the capital one travel card which is free and i'd be able to save more money. I am really worried about impact on credit though as I have had problems with my credit score in the past so I may wait until after i've renewed my mortgage. I'm with TD right now and I wouldn't want to get stuck with TD because I have a bad score.


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## carverman (Nov 8, 2010)

> 10% is based on credit inquiries, how often you apply for credit in the last 12 months.
> 
> It is better to have 3 cards with $330 balance and $1,000 limits on each card rather than 1 card with $990 balance and $1,000 limit.


 ^
This is such BS!...I'm glad that I don't bother with these consumer slimers (Transunion/Equifax)
No wonder we have so many people these days with credit history problems..open up a bunch of credit cards, rack up the charges to the limit,
then worrying how to pay them off to maintain your score.


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## carverman (Nov 8, 2010)

christinad said:


> I don't know why keeping $5000 irks me but it does. Ultimately, i'd like to switch to the *capital one travel card which is free*
> and i'd be able to save more money.[/B]


This is an oxymoron.


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## Westerncanada (Nov 11, 2013)

Nemo2 said:


> Did you factor in all the other applicable chargeable bank fees that are waived when you carry the $5K balance, and calculate how much interest you'd have to make in order to offset them? More than you'll make on a GIC I'd think........Plus, if I were you, (which I realize I'm not), I'd consider that money going into a TFSA should perhaps stay there and accumulate, rather than being withdrawn.


I believe this amount has changed to $3500 Balance... 

I know it used to be $5000 for me as well but they lowered it to $3500 to waive monthly bank fee's and I believe the Visa Fee as well!


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## Nemo2 (Mar 1, 2012)

Westerncanada said:


> I believe this amount has changed to $3500 Balance...
> 
> I know it used to be $5000 for me as well but they lowered it to $3500 to waive monthly bank fee's and I believe the Visa Fee as well!


This is what I show, (and our latest online statement concurs):

http://www.tdcanadatrust.com/produc...accounts/all-inclusive.jsp?cm_sp=cTDCA004-286



> Account Fees and Waivers
> 
> $29.95/month - or waived with a $5,000 minimum monthly balance


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## Westerncanada (Nov 11, 2013)

Nemo2 said:


> This is what I show, (and our latest online statement concurs):
> 
> http://www.tdcanadatrust.com/produc...accounts/all-inclusive.jsp?cm_sp=cTDCA004-286


I am with the Unlimited Chequing.. 


What’s included in the Unlimited Chequing Account?

Enjoy the convenience of unlimited transactions:

Unlimited transactions include cheques, ATM deposits/withdrawals/bill payments, debit-card transactions
$20 off the Annual Fee for the first year for your choice of one of three select TD Credit Cards1(opens new window)(opens new window)
$5242(opens new window)(opens new window) value of account features

Account Fees and Waivers

$14.95/month - waived with a $3,500 minimum monthly balance3(opens new window)(opens new window)
Senior's Rebate: 25% off the monthly fee for account holders aged 60+ (a value of $3.75 per month)4


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## Westerncanada (Nov 11, 2013)

Westerncanada said:


> I am with the Unlimited Chequing..
> 
> 
> What’s included in the Unlimited Chequing Account?
> ...



But you are correct.. this only covers me for $20 Off my Annual fee...


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## Nemo2 (Mar 1, 2012)

Westerncanada said:


> But you are correct.. this only covers me for $20 Off my Annual fee...


And even that, apparently, is just for the first year, (and for the primary cardholder only.......we have a card each, for which all fees are waived).


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## Westerncanada (Nov 11, 2013)

Nemo2 said:


> And even that, apparently, is just for the first year, (and for the primary cardholder only.......we have a card each, for which all fees are waived).


I'm glad you mentioned this.. I am going to upgrade my account next year pre-fee to make sure they remove it for me  

i also notice this includes a safety deposit box?


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## Nemo2 (Mar 1, 2012)

Westerncanada said:


> i also notice this includes a safety deposit box?


Yes...we have one assigned, and hold the key, even though we haven't had occasion to use it.


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## marina628 (Dec 14, 2010)

I cancelled my oldest credit card last year and my Fico took a hit about 30 points but it did not bother me since I have no need to apply for new credit.I plan to cancel my Aeroplan card at the end of the year because since selling our business my credit card use took a significant drop.We use our Canadian Tire cards to get the 5% Canadian Tire money and my husband has the TD Travel one.So in my wallet I will be left with my MBNA card and my Canadian Tire Credit card with Hubby have the TD Travel Card and his Canadian Tire Card.We have over 500,000 Aeroplan points to use so that will keep us busy for a while.


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## My Own Advisor (Sep 24, 2012)

Over 500,000 Aeroplan points?? Wow. Great stuff...see the world in business class!


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## marina628 (Dec 14, 2010)

We were spending $30,000 a month on average for our business ,these points will probably we used for Florida ,San Juan and Vegas trips ,economy


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## brad (May 22, 2009)

I understand that cancelling a credit card decreases your credit score, but I don't understand why. It seems counterintuitive to punish people for a behaviour that is likely to have nothing but positive effects on their finances and reduces risk to lenders. What is the rationale behind it, and could it be changed through legislation?


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## Nemo2 (Mar 1, 2012)

brad said:


> could it be changed through legislation?


Then beware the slippery slope towards subprime loans?


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