Key Insights to Keep in Mind
- Shutting down a credit account might dent your credit rating by trimming your credit history and bumping up your credit utilization ratio.
- Choices for managing outdated cards include downgrading, upgrading to unsecured versions, or leaving the card active for infrequent purchases.
- Expired debit and credit cards can be safely disposed of by chopping them up or mailing them back to the issuer for eco-friendly recycling.
Every plastic credit companion eventually hits its expiration date, or you may opt to cancel it yourself. Sometimes, incessant use gradually crumbles the card’s physical integrity enough to necessitate a fresh replacement.
So, what’s the best move once that shiny new card drops into your mailbox? How do you responsibly deal with the relics of your past plastic?
Neglecting the proper way of handling old credit cards could have lingering negative effects on your creditworthiness. Here’s how to sidestep those pitfalls and manage your old cards with savvy.
What To Do With Cards You’ve Outgrown
Got a credit card gathering dust or not offering much value? You’re swimming in options. You might shut down the account, opt for a downgrade or upgrade, or simply hold onto it.
Closing Accounts — Handle With Care
While shutting an account may seem straightforward, beware—it can clip your credit history length, a factor that typically bolsters your credit score. Older accounts are especially valuable for this reason.
Credit utilization, in particular, plays a starring role here: closing an account slashes your available credit, potentially pushing your usage percentage into risky territory that can ding your rating.
| Experts commonly advise keeping usage under 30%, meaning maxing out at $3,000 balance per $10,000 credit available. |
Those with multiple cards might consider transferring balances or asking about moving to a no-annual-fee card within the same issuer’s offerings.
Downgrade or Upgrade: The Middle Ground
If your issuer hasn’t automatically rolled your account to an unsecured card, but you’re ready to evolve your financial landscape, a quick call could open doors. They may pitch card upgrades featuring improved perks or enhanced reward programs, assuming your credit profile qualifies.
Conversely, if you hold a no-fee card you no longer find worthwhile, upgrading to a higher-tier card without opening a new account could be the smoothest path forward.
Keep It Alive With Light Use
Not ready to toss or twist the card into a new form? Consider keeping it alive with minimal charges—charging a small amount monthly, like a gas fill-up or a grocery run, can keep your account from slipping into dormancy.
Setting up autopay on recurring subscriptions (say, for your favorite streaming or news service) not only simplifies life but also effortlessly maintains your account’s active status.
Pro tip: If you anticipate not using the card for a while, freeze or lock it digitally and stash it securely to curb unauthorized spending.
Retiring Expired Cards Responsibly
When a credit or debit card crosses its expiration threshold, getting rid of it is straightforward. Post-receipt and activation of your replacement card, slicing the old one into bits and tossing it away is the typical route.
Some shredders come with slots designed specifically for plastic destruction — handy for obliterating outdated cards alongside confidential paper documents.
Handling Metal Credit Cards
Got a sleek metal card? Many issuers offer a mail-back destruction service. Give the number on your card a ring to request a prepaid envelope, making the disposal process hassle-free.
Alternatively, if a nearby branch exists, dropping off your metal card for destruction or forwarding is often an option, even if the branch doesn’t shred the card themselves.
Collector’s note: Vintage cards, especially pristine or unsigned ones, sometimes carry collectors’ value. Those featuring celebrities or unique designs tend to attract even more attention.
Your expired plastic might not currently be a treasure, but who knows—whatever’s tucked away in your sock drawer could become a prized artifact someday.
What to Check Before Closing or Tossing Old Cards
Before you retire an old card, confirm that your replacement is activated and ready. That way, any problems can be sorted by contacting the old card’s issuer if necessary.
Closure of accounts demands extra prep:
- Clear off any lingering balances, including accrued interest.
- Redeem or transfer points, miles, or cashback rewards if you have them.
- Remove the card from merchant and utility autopayment profiles to prevent payment failures.
Rediscovering Lost Credit Accounts
Over time, it’s easy to forget or lose track of old accounts. Maybe you misplaced the card or simply forgot you signed up for it. Recalling the details—issuer, card type, or account number—can prove tricky.
To unearth forgotten cards:
- Request your credit reports for free from the three major bureaus: Experian, Equifax, and TransUnion.
- Scrutinize these reports carefully to spot neglected accounts and verify overall accuracy.
If old cards surface, deciding whether to ask for a replacement or leave them dormant is up to you. Be mindful: issuers may close inactive accounts automatically after extended inactivity.
Final Thoughts: Managing Your Credit Card Fleet
Disposing of an outdated credit card is often a step in swapping it out for a better-suited one. Yet, a quick call to your issuer might reveal downgrade options or other alternatives to closing the account outright.
Should you press forward with closure, remember to steer clear of reckless spending on other cards. Careful credit management ensures you bounce back swiftly and keep your credit standing intact.