I got my first credit card 16 years ago. Here’s why I always 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 the length of your credit are 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 that you don’t want to pay, see if you can just downgrade the card.

Credit cards are a financial tool that can make it easier to pay for purchases. If you make the right choices, they can also help you build your credit. I got my first credit card 16 years ago to establish 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 had the chance to learn a little more about personal finance before graduating from high school. I knew it would be beneficial to get a credit card, provided I used it carefully. So I opened my first credit card before starting college. I was careful with this card and only loaded it for small purchases and paid my bills in full each month.

The first card I received had no benefits and offered no rewards. But there was 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 rating is critical and it can determine the financial opportunities you qualify for in life. While it would be nice not to have to worry about a credit score at all, the truth is that most consumers need to keep an eye on their credit.

You can more easily qualify for rewards credit cards, auto loans, or other loans with a great credit rating. If you have a bad score or little or no credit, you may find it difficult to qualify for a loan or may have to settle for a loan with a higher interest rate or other unattractive terms. .

In the end, opening my first credit card shortly after I turned 18 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 in my second year of college. I drove this car with pleasure for over a decade.

Keeping an old credit card account open is a good idea

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

  • Payment history: Your payment history represents 35% of your FICO credit score. Paying your bills on time can have a positive impact on your credit score. Regularly charging a small amount of money to 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 usage represents 30% of your FICO score. Your credit utilization rate is the amount of available credit you are using. It is better to have a lower credit utilization rate or to use less of your available credit. Opening an old credit card account can increase the total available credit you have and, in turn, can help you maintain a lower credit utilization rate.
  • Length of credit history: The length of your credit history is a smaller credit score factor, but it’s still important. This factor represents 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 longer.

Downgrade old cards for 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 the account to a card with no annual fee. This will keep your account open and active so your account history is always there.

Don’t rush to get rid of an old credit card. If you still have your first credit card, you may want to keep the account open. This could help improve your credit score and qualify you 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 to learn more.

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