American Express and Credit Scores

I am considering closing two of my long-standing American Express accounts that I have had for around 11 and 15 years. One is a charge card with no pre-set spending limit and one is a credit card with a credit limit of $15,000. I use both regularly and pay them off in full every month. I never carry any balances over to the next month. My plan is to close those and consolidate to the new American Express Premier Rewards charge card. Will closing those two accounts in favor of opening a new American Express account have a negative impact on my credit rating? If so, would that only be temporary and by how many points do you estimate? My median credit score is 770.

Thanks!testtest

Scott,

Unfortunately closing those accounts will affect your credit, but I simply can't predict by how much. It will depend on how many other accounts you have, how old they are, as well as other factors. You may want to consider using a credit score simulator from FICO. It will let you play "what if" scenarios with your scores. You may find it makes sense just to close one account for now, for example, and then consider closing another at a later date.

Credit.com offers that product in the FICO /
Suze Orman kit.

If you do run the numbers, I'd love to hear what you find out!

Gerritesttest

Thanks for your help. I'll let you know what I find out. testtest

This message was edited 1 time. Last update was at 01/24/2010

OMG!

Don't close the accounts! If you already have an Amex charge card, such as the Green, all you have to do is ask them to switch you (it's called a product change) to the Premier Rewards card. I switched my Gold to a Platinum last year online, and they didn't even change my account number. They just sent me the new card. Your history with a charge card really builds up the amount you can charge at any one time. You don't want to lose that.

As for the regular card, just stop using it but every few months to buy gas. You don't know how many people would die for a $15,000 Amex card. Someday you may need to charge something in an emergency, and pay it over time. I use my Costco Amex for that, although so far I have not had to carry any balance on it.

Technically, closing the accounts won't hurt your FICO score since the good account will stay on your report for 10 years. But, this is simple. Just change the charge card to the one you want, and don't cancel that revolving card.

P. S. If you are thinking about changing cards for the Reward Points, Amex can also switch your revolving card to a revolving card that accumulates points, too. That way you could get points on both cards.

testtest

perfectstorm2 - Thanks for telling us that switching Amex programs is an option without closing the account. That's very helpful. (Of course, scotteanker, I'd double check with Amex to make sure that applies in your situation.)

However we disagree with the following statement:

"Technically, closing the accounts won't hurt your FICO score since the good account will stay on your report for 10 years." Here's our stance on the issue of closing accounts:

http://www.credit.com/credit_information/credit_help/The-Top-10-Credit-Mistakes.jsp

Thanks again for the tip!testtest