I noticed I was starting to diverge from the topic on the AA 75,000 thread with some
credit based questions.
I'm trying to get to the bottom of the concept of either closing mileage cards that have "bonus'ed", or keep them open.
Note I'm more interested in the age factor than utilization, because I have near zero utilization.
For age, credit scores are affected by: (1) Total age, and (2) average age of all accounts. Let's ignore (1) for now because that one is easy, just don't close your oldest card.
Now searching the web, I am finding conflicting details about exactly what "average age means".
- Is it average age of ALL accounts, revolving and other types?
- Is it average across open AND closed?
- Is it open accounts ONLY?
- When one closes an account, after say 3 months, is the average age for that account still included? If so, is it from open date to current date, or open date to close date?
Perhaps my googling was poor, but I found it difficult to get a clear answer off Mr. Internet.
I have two trains of thought
(A) Cancel after getting the miles
Pros: Less to manage year by year.
Cons: Effect on average age on credit score?
(B) Keep all cards open until the annual fee is due, and when they are due, work to get retention perks.
Pros: Better average age = better credit score?. Bonus miles.
Cons: MANAGEMENT. If the wife and I do ~6 cards a year, at some point I may need to juggle annual fees of 20+ cards? How do you do it?
Also, Total Credit Obligations. I imagine the total amount of credit available (in dollars, or cards) must max out sometime
So tying this into what so many do here, what do YOU do after getting the bonus miles, and what's your reasoning? And does anyone have a clear understanding of the definition of "average age"?
Some references on "average age" definition:
Fico Forums Discussion Thread
Credit.com Article