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What To Do With Old Unused Credit Cards

Paul11710 asked a good question in the comments of my post about credit card strategies [3] and that was my take on what you should do with old credit cards that have outlived their usefulness. Back when 1999, my credit card of choice was the good ole Discover Card because it gave me 1% cashback and I could take my rewards and double them for a Staples gift certificate – effectively giving me 2% cashback, a windfall compared to the cashback offers of that era. In 1999, I was in college and doing a lot of the rebate arbitrage plays on eBay where I’d buy something, submit the rebate, and resell on eBay for a modest profit. I stopped using the Discover Card when the cashback-to-gift-certificate multiplier dropped from 2x to 1.5x but I’ve always kept the card in my desk just in case.

Why don’t I just cancel it? For various cards that I’ve applied for and stopped using within the last three years, I cancel them outright. The reason is the average age of your credit lines is a component of your credit score and so a card that’s 7 years old will only increase my average age whereas a card of under 3 years old will decrease my average age. Take a look at all of your credit cards and find out your average credit card age, mine is somewhere in the neighborhood of 3 years, and cancel the ones that are younger that you don’t use and keep the ones that are older and you do. If you have multiple cards from the same company, ask to roll your younger credit limits into your older card. Some cards will do this, some will not (Discover will not, at least for me).

Be very careful of how many cards you keep in your desk and keep a good record of them in the event someone steals those cards (or somehow gets access to them). I periodically check my Discover card account just to be sure that there aren’t any unauthorized charges since I don’t use the card, it’s very easy for someone to buy something and have it go unnoticed until a statement arrives (which is okay from a liability perspective but I want to be diligent and not be surprised).