Credit Cards

I got my first credit card 16 years ago. Here’s why I still have it in my wallet

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Keeping your oldest credit card account open could increase your credit score.

Key points

  • Your payment history, the amount of available credit you use, and how long you’ve had credit are some important factors that make up your credit score.
  • Keeping your oldest credit card account open could boost your credit.
  • If your old credit card has an annual fee you don’t want to pay, see if you can simply downgrade the card.

Credit cards are a financial tool that can make it easier to pay for purchases. If you make the right moves, they can also help you build credit. I got my first credit card 16 years ago to build credit. Although this card is no longer the main credit card I use, I still carry it in my wallet. Find out why it’s a good idea to keep an old credit card:

I was lucky enough to learn a bit about personal finance before graduating from high school. He knew it would be beneficial to get a credit card, as long as he used it carefully. So I opened my first credit card before I started college. I was cautious with this card and only charged it for small purchases and paid my bills in full each month.

The first card I got had no benefits and no rewards. But it had no annual fee and it helped me learn how to use a credit card responsibly. Sixteen years later, I still keep that credit card account open to help maintain my credit score.

Your credit score can affect your financial future

Your credit score is essential and can determine what financial opportunities you are eligible for in life. While it would be nice not to have to worry about your credit score at all, the truth is that most consumers need to watch their credit.

You can more easily qualify for rewards credit cards, car loans, or other loans with an excellent credit score. If you have a low score or little or no credit, you may have difficulty qualifying for a loan or may have to settle for a loan with a higher interest rate or other unattractive terms.

It turns out that opening my first credit card shortly after my 18th birthday and using it carefully paid off. Since I had already established credit and had a good credit history, I was able to qualify for a 0% auto loan as a sophomore in college. I happily drove that car for over a decade.

Keeping a previous credit card account open is a good idea

Several factors make up your credit score. Keeping an old credit card can help improve your credit score. Here are three reasons why you might want to do this:

  • Payment history: Your payment history accounts for 35% of your FICO credit score. Paying your bills on time can have a positive impact on your credit score. Regularly loading a small amount of money onto an old card and paying off the balance in full can help keep the account active and influence your overall credit payment history.
  • Use of credit: Your credit utilization accounts for 30% of your FICO score. Your credit utilization ratio is the amount of available credit you use. It’s best to have a lower credit utilization ratio or use less than your available credit. Having an older credit card account open can increase the total available credit you have and, in turn, can help you maintain a lower credit utilization ratio.
  • Length of credit history: The length of your credit history is a minor credit score factor, but it’s still important. This factor accounts for 15% of your FICO credit score. Having an older account on your credit report could improve your credit score because it shows you’ve had credit for a longer period of time.

Discount old cards with an annual fee

Do you have a card with an annual fee that you no longer plan to use? You can contact your credit card issuer and ask them to downgrade to a card with no annual fee. Doing this will keep your account open and active, so your account history will still be there.

Don’t be too quick to get rid of an old credit card. If you still have your first credit card, you may want to keep the account open. It could help you improve your credit score and help you qualify for better financial opportunities in the future.

If you’re looking for a new credit card, check out our list of the best credit cards for more information.

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