How Does OPENING and CLOSING Credit Cards Affect Your Credit Score?

One of the most commonly asked questions among Miles & Points newbies is how opening and closing credit cards actually affects your credit score.

In this video, let’s clear up some of the misconceptions around this topic by thinking about how each component of your credit profile is affected by each step along a credit card’s life cycle, from the initial application to the first statement being posted, through to product-switching and, if necessary, cancellation.

By breaking down the individual impact to your credit health at every step along the way, you can see how playing the credit card game in a responsible fashion can end up strengthening your credit score over time.

Read more on Prince of Travel:

0:00 Introduction
1:27 How Does Your Credit Score Work?
3:15 Application
4:48 First Statement
6:58 Subsequent Statements
8:38 Cancellation (Part 1)
9:37 Product Switching
10:53 Cancellation (Part 2)
13:07 Summary of the Credit Card's Life Cycle

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[princessmeganelsa]

I always PAY credit bill in Full each monthly early the Better!! 🙃🙃

[maxwelltan]

Great video. Confirmed my knowledge to credit score is correct. I manage both me and my wife’s credit cards and recently got her credit score to 835 while I’m just a bit under 800. She has perfect payment history without even knowing it because I’m paying her credit cards and managing her credit score like a god 😂. We receive annoying pre-approval offers from all five major Canadian banks monthly, with some LOC credit limit as high as $50k😮. Even risk-adverse banks like TD and Scotiabank pre-approved us for something and keeps sending offers steadily. One day TD sent me a gigantic brochure inviting me to accept their pre-approval. I laughed so hard and shredded that “amazing offer”

[scottnglsh]

This dude is the most slept on youtube channel. Definitely gonna be 100k + subscribers soon!

[crippledgenius]

Great video ive been churning a long time I open accounts once every 12-16 months. I don't really care about my score, if I needed a boost I can always prepay statement balances. It's all a game you have to play to win

[markcluff]

Prince, can you talk about getting business credit cards in Canada that don’t hit your personal credit. I’m not talking about when you get it. But over time it doesn’t hit your personal score.

[mikebz]

As long as I am 760+, it's all good. You don't get better rates being higher than that. I'm typically between 780-800.

[itstonyholiday]

You're a legend Ricky. Perfect explanation, easy to understand 🙌

[bronzremix]

Am I the only one who when hearing his voice am reminded of that kid you were to school with who was smarter then the rest of us.

[luvkpop]

Thank you for the advice on keeping the oldest card, didn’t know about its importance.

[HWKGAMING]

hey Ricky, are there any plans to update the product switching guide on your website? I'm curious to know what the latest best practices are for each issuer, or how things have changed over time :)

[alexseip]

Just came across your channel today and love all your comparisons and videos highlighting the pros and cons of each credit card. I've had the WestJet Elite Rewards Mastercard holder for years but haven't focused on using any of its benefits for a really long time now. So today I wanted to research a little bit and see what I've been missing out on and to think about renewal time and if I want to choose something else. So your channel has been awesome, and to boot your videos are well shot and entertaining. Cheers.

[brumasbusiness]

I don't know how come people give thumbs down, it's just ridiculous.

[matthewJ]

More like how is it going to affect your overall account history.

[allthingsunrelated]

Really great information PoT! I’ve used bonus points for two flights on a Sapphire, paid for a flight with Capital One points, and now I’m working on my bonus points for my new AMEX Platinum that I recently received. I plan on doing a video myself for US military folk in regards to SCRA. When applied, caps APR and waives annual fees for US military by law. Keep up the good work and I thoroughly enjoy watching your videos!

[benohana]

Another great video by the Prince of Travel himself! I definitely learned some new tips and tricks really liked how you illustrated the components of the credit card pie graph(i.e. what goes into your credit score), speaking about canceling cards, downgrading, and product switching as well.

Bottom Line I definitely see myself like grabbing like 2 cards a year, and I probably won't be the canceling type just because of the downgrading options available to increase account longevity etc. For credit scores, I'd check like once or twice a year.

[torreysirdevan]

Thanks so much for this man. Really appreciate your knowledge and the work you guys put into these vids. It doesn't go unnoticed 🙏🙏

[ll_distribution]

Great tips Ricky well done even if the bureaus say they won't knock under 20-30% "recommended" if you aim to Keep utilisation lower then 8.8% even aim for 3-5% if possible by getting in the habit if paying what ever extra UT% before the statement posting to insure triple A file. Another tip is to watch which day you apply in relation with your other cards I tend to vary CCs dates posting around the month to get a full real 21 days revolver. Amex is best at posting reg monthly which is favorable for good payers and you'll be rewarded faster too. FICO forum explains also that new cards get a hike in history at 3 6 12 months and at 2 yrs that bonus is over so as your hard inquiry. Cheers!

[andrecunningham]

Ijust watched all your videos and i just want to say thank you for all your knowlege! Please keep making videos like these to help people like myself make good credit card decisions!!

[theteacherandbeyond]

I really should switch over my other devices to the same account since I watched this on a different device... but another great video Ricky!! Maybe I'll watch it again just to help your views a bit more ;) Cheers!!

[anpc]

Does downgrading lose rewards balance?
I got the RBC avion infinite and thinking to downgrade and focus on other cards