Does It Make Sense to Cancel A Credit Card with No Annual Fee?

Jan 26, 2014

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TPG reader Clayton tweeted me to ask:

@thepointsguy: Is there ever a reason to cancel a card with no annual fee? I have a Macy’s card I used in the past, but now sits in a drawer.”

The largest factor in having a high credit score is paying off your balances on time. But there are several other factors that play a part in your credit score as well, such as the average age of your accounts. So, if you’ve got a bunch of accounts you’ve had open for several years, that can actually help your score.

Main credit score factors
Main credit score factors

Clayton has a Macy’s card from years ago, but he just keeps it in a drawer. I would recommend keeping that account open. There’s no reason not to, as long as you don’t have any automated payments going onto that card that you might forget about and miss a payment. I don’t see a risk in keeping the account open in order and in good standing.

It’s also good idea to have different types of credit lines and not just regular credit cards. Most department stores have charge cards, so it’s a nice idea to have another kind credit line in the mix. So I say keep the Macy’s card open. Don’t use it, but monitor it just to make sure there are no fees or usage there shouldn’t be. Keeping no-annual-fee cards open is a great, easy way to increase the credit history factor of your credit score and thus boost your overall score.

Let me know if you have any other questions by messaging me on Facebook, Tweeting me or emailing me at

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