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Old Aug 9, 13, 1:14 am   #1
 
Join Date: Apr 2007
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Churn Amex cards to increase average age of accounts?

This may be old news to some(/most?) of you, but I couldn't find anything relevant in the stickies or through a search.

I'm fairly young, so the biggest problem I have when running churns/AORs is that it kills my average age of accounts. But thankfully, one of my oldest cards (about 7 years) is an Amex. As it turns out, (and this is the part that probably isn't news to anybody in this particular forum), Amex lists the age of your oldest Amex account as the age of any and all accounts that you have with them.

So my question is this: since accounts show up on your credit report for 10 years after they're closed, would it make sense to open a couple more Amex cards, keep them for 2-3 months, close them, and repeat? It would seem that this would help to counteract the damage done by all the other new accounts I open - I add a few new accounts that are only 1 month old, but also add a couple that are 7 years old.

Am I missing something (besides the fact that this may be common knowledge/practice around here)? Does this work for all Amexes (including things like SPG), or just certain ones (like non-cobranded cards)?
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Old Aug 9, 13, 4:26 am   #2
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Sorry, I haven't understood the post!

Most people thinking about applying for a new Amex Card when still holding another one do it for purposes of:

+ a colour change either to a higher colour with a higher annual fee but more service
+ keep the MR account alive when not using Amex much and therefore changing to the less expensive card with full service (in most markets some cobranding cards respectively the green one).
+ grab a decent offer with a welcome bonus in form of free MR points.

So I don't see any sense in opening four or five new credit cards and then cancelling them after two or three months.

IMHO it may be a warning signal for the credit card issuer that you would like to increase the available credit line without asking for it. This *may* trigger a Financial review with the obligation to send in some info like the tax statement.

So I am not able to help here at the moment. Please clarify what the purpose of this transaction should be?
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Old Aug 9, 13, 4:55 am   #3
 
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You want to counterbalance the fact that you opened some new account by opening even more accounts and then close them.

If you are worried about your credit score, certainly don't open more credit card accounts. Having too many credit accounts open, means that it is possible that you spend too much on credit and not able to pay back. This is often a cause why a credit cards are refused which leads to bad credit scores.

I am not a expert but I think one should not have direct access to credit more than 3 times one's salary. The number may vary per person. The larger salary the more disposable income, etc.

To get good credit scores, it is far more important that you always pay the full amount off each month.
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Old Aug 9, 13, 5:08 am   #4
 
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Quote:
Originally Posted by gum View Post
+ keep the MR account alive when not using Amex much and therefore changing to the less expensive card with full service (in most markets some cobranding cards respectively the green one).
If you have an Amex Blue, then you don't have to worry about MR points dropping off your account, right? Granted the Blue can't transfer to airline/hotel partners.
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Old Aug 9, 13, 5:20 am   #5
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Originally Posted by agp423 View Post
If you have an Amex Blue, then you don't have to worry about MR points dropping off your account, right? Granted the Blue can't transfer to airline/hotel partners.
AFAIK nearly every Amex card preserves the pile of MR points you have collected yet.

I think your statement is true but the best way is to shortly reconfirm it on the Amex website of your country.

Or not to step down to the "Blue" level but keep the "Green" level of the card - in order to protect the transfer opportunity.

Hope this helps.
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Old Aug 9, 13, 5:39 am   #6
 
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I have a BCE, Blue, and PRG. I have 181 MR points left. I am cancelling the PRG in this month or the next, I will report back. Eitherway, 181 MR points ain't worth much.
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Old Aug 9, 13, 7:05 am   #7
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Quote:
Originally Posted by gum View Post
AFAIK nearly every Amex card preserves the pile of MR points you have collected
Only if the card participates in Membership Rewards. In the USA American Express issues cards linked to several other rewards programs: Delta, JetBlue, Hilton, Starwood, Lowe's, BlueSky, and cashback. Holding these cards does not preserve a Membership Rewards balance.
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Old Aug 9, 13, 3:24 pm   #8
 
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You're right, I think there's some confusion over what I'm asking. I should clarify:

Everything on my credit report is fantastic, with the exception of average age of accounts. I have a perfect payment history on all of my accounts, for as long as I've had them. I have an appropriate number of accounts, with credit limits well within the number described above. I know for a fact that I have plenty of available credit with Amex, whether I increase my credit line on my current card, or apply for a new one. These are not the issues I'm talking about here.

I'm asking simply about average age of accounts. And yes, I'm talking about opening new cards to counteract opening new cards. When two new cards have an age of one month, and two new cards show an age of 7 years, that comes out to an average age of roughly 3 1/2 years. Yes, the methodology is somewhat counterintuitive, but it if wasn't, I wouldn't have to ask.

Can someone familiar with American Express's policy regarding backdating the reported age of credit cards provide any kind of insight as to whether there's any reason this wouldn't work?
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Old Aug 9, 13, 4:07 pm   #9
 
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Quote:
Originally Posted by Frenske View Post

If you are worried about your credit score, certainly don't open more credit card accounts. Having too many credit accounts open, means that it is possible that you spend too much on credit and not able to pay back. This is often a cause why a credit cards are refused which leads to bad credit scores.

I am not a expert but I think one should not have direct access to credit more than 3 times one's salary. The number may vary per person. The larger salary the more disposable income, etc.

To get good credit scores, it is far more important that you always pay the full amount off each month.
Income has nothing to do with credit scoring. Opening more accounts with amex can help people if the accounts are backdated. When closed, the accounts will remain for up to 10 years.

Having too little credit is a bigger problem than too much. The more accounts I've opened the higher my scores have gotten once the initial points lost for new accounts fades. I have over 25 open cards and 7 figures in available credit and scores over 800.

I agree paying in full is the best way to use cards. Some people even pay before the creditor reports balances to the CRAs so as to have lower utilization reporting.
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Old Aug 9, 13, 4:09 pm   #10
 
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Originally Posted by benjiem1 View Post
You're right, I think there's some confusion over what I'm asking. I should clarify:

Everything on my credit report is fantastic, with the exception of average age of accounts. I have a perfect payment history on all of my accounts, for as long as I've had them. I have an appropriate number of accounts, with credit limits well within the number described above. I know for a fact that I have plenty of available credit with Amex, whether I increase my credit line on my current card, or apply for a new one. These are not the issues I'm talking about here.

I'm asking simply about average age of accounts. And yes, I'm talking about opening new cards to counteract opening new cards. When two new cards have an age of one month, and two new cards show an age of 7 years, that comes out to an average age of roughly 3 1/2 years. Yes, the methodology is somewhat counterintuitive, but it if wasn't, I wouldn't have to ask.

Can someone familiar with American Express's policy regarding backdating the reported age of credit cards provide any kind of insight as to whether there's any reason this wouldn't work?
In short, as long as the cards are backdated adding Amex issued cards (not cards by other issuers on the amex network) will help your AAoA. The only cost, credit score wise, is the temporary effect of the inquiry.
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Old Aug 10, 13, 1:53 am   #11
 
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Quote:
Originally Posted by Dr_wanderlust View Post
In short, as long as the cards are backdated adding Amex issued cards (not cards by other issuers on the amex network) will help your AAoA. The only cost, credit score wise, is the temporary effect of the inquiry.
Thank you very much for the confirmation. That helps a lot. I knew I wasn't crazy.

For clarification for others who are interested in this, it looks like all the cards you can apply for on americanexpress.com (http://www304.americanexpress.com/ge...c_viewallcards - click "View All Cards") are Amex issued cards. The Amex network cards are those issued by the companies on this page (minus American Express, of course):
http://www1.amexnetwork.com/cardresources/

This is definitely one of the most useful bits of information for those of us who are fairly young. Getting an Amex early on (and then a few more once your credit is good enough) could really do wonders for your credit score. I know it's going to increase my AAoA by about 2 years by the time all is said & done. At this point in my life, that's pretty big, especially with all the card churns trying to drag that number down instead.
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Old Aug 12, 13, 10:10 pm   #12
 
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All that churning sure seems like a lot of work for such a minor change to the FICO score.

In general, this is something I see online a lot: hand wringing about AAoA. Let's look at that facts: Length of Credit History is only 15% of the FICO score, and length of credit history encompasses more than just age of accounts.

This interview with the FICO guy is a little old, but it is still very enlightening: Does Closing an Old Credit Card Hurt Your Credit Score?

Hey, if you want to churn, that is between you and American Express, but if it actually makes a worthwhile difference to your credit score, come back and tell us. I'll be more than a little surprised.
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Old Aug 13, 13, 1:19 am   #13
 
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Originally Posted by jn in ca View Post
All that churning sure seems like a lot of work for such a minor change to the FICO score.

In general, this is something I see online a lot: hand wringing about AAoA. Let's look at that facts: Length of Credit History is only 15% of the FICO score, and length of credit history encompasses more than just age of accounts.

This interview with the FICO guy is a little old, but it is still very enlightening: Does Closing an Old Credit Card Hurt Your Credit Score?

Hey, if you want to churn, that is between you and American Express, but if it actually makes a worthwhile difference to your credit score, come back and tell us. I'll be more than a little surprised.
I can certainly see your point, and I probably should have clarified that I'm planning to get more out of these churns than just an increased score. For example, I just picked up the SPG card, so in addition to increased AAoA, I'll be getting 30k SPG points. The fact that it's Amex just put it a little higher up on my list.

And yes, obviously AAoA is only 15% of your score, but that's still the 3rd most important factor. For me, it's also really the only negative mark on my report. It's really pretty darn weak compared to everything else. Consider this something of an investment - it'll be a little annoying up front, but having extra accounts that are 3-4x older than my AAoA sure isn't going to hurt anything.

It's effectively changing the past. It's like being able to go back in time and open more cards, with higher credit limits, than you ever could have at that point in your life. If you had missed payments when you were younger, and all of a sudden found out that there was a way to erase those from your report, would you not jump at the chance?
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Old Aug 13, 13, 9:37 pm   #14
 
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Quote:
Originally Posted by bobert24 View Post
I can certainly see your point, and I probably should have clarified that I'm planning to get more out of these churns than just an increased score. For example, I just picked up the SPG card, so in addition to increased AAoA, I'll be getting 30k SPG points. The fact that it's Amex just put it a little higher up on my list.

And yes, obviously AAoA is only 15% of your score, but that's still the 3rd most important factor. For me, it's also really the only negative mark on my report. It's really pretty darn weak compared to everything else. Consider this something of an investment - it'll be a little annoying up front, but having extra accounts that are 3-4x older than my AAoA sure isn't going to hurt anything.

It's effectively changing the past. It's like being able to go back in time and open more cards, with higher credit limits, than you ever could have at that point in your life. If you had missed payments when you were younger, and all of a sudden found out that there was a way to erase those from your report, would you not jump at the chance?
Because it's not worth getting FRed or having 5 recently closed accounts or wasting credit pulls just to artificially boost your AAoA? Don't get me wrong, I'm in the same boat; low AAoA but was added as an AU long before my peers could even app for a CC. So the more Amex I get, the more I improve my AAoA.

But the point is, what's the endgame? Sure, everyone wants a good score, but after 740 does it really matter? What matters is whether you get denied or not on your app sprees. You could improve your AAoA, but at the expense of hard pulls and # of accounts. If any of your accounts get a second look they'd see a bunch of closed accounts (as well as hards from Amex if you pull from the same bureau).

tl;dr: way easier to just hold good amex cards like SPG or plat and churning BGR/PGR/DL/Hilton/etc normally, instead of "apping for a bunch of cards, closing them in 2-3 months, repeat"
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Old Aug 13, 13, 11:38 pm   #15
 
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Originally Posted by psychoandy View Post
Because it's not worth getting FRed or having 5 recently closed accounts or wasting credit pulls just to artificially boost your AAoA? Don't get me wrong, I'm in the same boat; low AAoA but was added as an AU long before my peers could even app for a CC. So the more Amex I get, the more I improve my AAoA.

But the point is, what's the endgame? Sure, everyone wants a good score, but after 740 does it really matter? What matters is whether you get denied or not on your app sprees. You could improve your AAoA, but at the expense of hard pulls and # of accounts. If any of your accounts get a second look they'd see a bunch of closed accounts (as well as hards from Amex if you pull from the same bureau).

tl;dr: way easier to just hold good amex cards like SPG or plat and churning BGR/PGR/DL/Hilton/etc normally, instead of "apping for a bunch of cards, closing them in 2-3 months, repeat"
Easier, but not nearly as effective. I think you missed either the point, or the math. But that's ok - I've got the information I was looking for from this thread. Thanks, all.
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