What to do with a Credit Card that You No Longer Use
I have often been asked which credit card to cancel? The answer is that it depends. I will use my recent portfolio as an example on what I have done and how I made my decision. Below was what my portfolio looked like at some point in time:
I signed up for this credit card when they had the 50,000 sign up bonus, instead of the regular 20,000. I got my points and I was willing to hang on to this credit card for a while because there was no annual fee. But at some point I realized that I was better off using my other credit cards instead because they earn points value per $1 spent. Therefore I CANCELLED the card.
RBC Shoppers Optimum MasterCard
I have an account with Royal Bank, so I always need to have one credit card with them to qualify for a multi-product rebate. I originally got this credit card because of the 15,000 sign up bonus points and I thought I would use it at Shoppers to earn 15x per $1 spent. Furthermore, there is no annual fee, so I did not mind hanging on to it. But then I learned that I could TRANSFER the account to the RBC Visa Infinite Avion and get my annual fee waived (see below).
As mentioned above, I have this credit card mostly because I need to have one active credit card with Royal Bank to qualify for the multi-product rebate to save on banking fees. I received 15,000 sign up bonus points and I plan on KEEPING this credit card for at least a year. I will probably try to find out if I can get the fee waived again, otherwise, I may consider transferring to another credit card. I quite enjoy the points that I earn for the time being.
Capital One IHG Platinum MasterCard
I signed up for this credit card to get the 15,000 sign up bonus points. I wanted to hang on to this credit card for a while because it does not have an annual fee. But once I qualified for the Capital One Aspire Travel World MasterCard, I decided that I only need one Capital One credit card (see below), so I decided to CANCEL this one.
Capital One Aspire Travel World MasterCard
This credit card gives me a better return per $1 spent than the Capital One Priority Club Platinum MasterCard, so I plan on keeping this credit card for a while. Even though the annual fee is $120 a year, we do get up to $100 worth of points a year (depending on how you leverage the points). I also very much enjoyed the 35,000 sign up bonus points. Furthermore, I quite enjoy earning 2x points per $1 spent on all purchases, so this has generally been my go to credit card. So I plan on KEEPING this credit card.
CIBC Aerogold Infinite Visa Card
I originally signed up for this credit card when they had the first year annual fee waived promotion and 20,000 sign up bonus points. For the time being, my first year annual fee period is quite a few months away, so I will KEEPING this credit card and seeing how I feel in the coming months.
American Express Gold Rewards Card
I sign up for this credit card when they only had the 20,000 sign up bonus points promotion (now it is 25,000) and first year annual fee waived. I hung on to this credit card for 11 months before deciding to CANCEL it. I asked American Express to see if they could waive the fee, but they refused, so I ended up cancelling it. I quite like this credit card and I wish I could have hung on to it. I will look into re-applying for it again one day. I used this credit card on the 2x the points on certain categories (gas, groceries, drug stores and travel expenses).
American Express AeroplanPlus Gold Card
I signed up for this credit card when they had the 30,000 sign up bonus points promotion with a referral. I hung on to it for a few months then decided to CANCEL it. Earning only 1 point per $1 spent was just too low for me. There are too many other credit cards that earn more points per $1 spent.
Total: The grand total is 8 credit cards and 200,000 points. Though the points are valued differently for each program.
Conclusion: As you can see, there are different strategies that you can employ. If there is no annual fee, you can consider keeping it for as long as you feel that you have use for it. Otherwise, my first choice would be to transfer it to another credit card within the same institution, so that you can retain your account history. If that is not an option, then it may be simpler to just cancel it.
If you are worried about credit score implications, you can read the links below.
You can receive a $75 rebate on Greatcanadianrebates.com for the Capitalone world aspire card. People should also transfer their credit to a no fee card to have a lesser impact on your credit score.
Appreciate the tips!