Credit card accounts and credit score

Question

I m relatively a new resident in the US. I opened an account with BofA (oct/2016) and after struggles they approved me for their student secured credit card account (700$). After 4 months I applied for their cash back and I got approved with a credit line of (5000$). After 2 months I got an invitation from discover and I opened another account with a credit line of (5000$) and now they increased it by 1600 more. My credit score FICO keeps showing that it is impacted by the length of oldest account. My question, I really don't use the very first account and I m thinking of closing it, is it going to affect my credit score? If yes, what is the alternative?

Answer 1

When you close a credit card, you lose the available credit that counts toward your overall credit utilization. Higher utilization generally lowers your credit score.

For example, if you have one card with $500/1000 and another card with $0/1000, then your overall utilization is $500/2000 or 25%. If you close the card with 0 balance, your utilization climbs to 50%, which hurts your score.

However, if you don't need that extra available credit, such as when the limit is small or you don't generally carry balances from month to month, then you don't need the card. Closing it won't hurt you.

Alternatively, you can contact the card issuer and ask them to change the card to something that you can use, such as a better rewards program, and ask them to both unsecure the card (and refund your deposit) and increase the limit to something similar to your other cards.