Every credit card has a shelf life, and that’s true whether it surpasses its expiration date or you decide to cancel or upgrade to a new credit card. Sometimes even regular use can wear down your card so much that you need to get a new one.
There’s nothing wrong with this natural cycle, yet it does leave us with a problem to solve. What do you do with those old credit cards?
Unfortunately, handling old credit cards the wrong way can have a lasting negative effect on your credit score. With that in mind, it’s important to understand the best ways to deal with old cards and expired cards you accumulate over time.
Have a credit card you don’t use? Don’t cancel it
If you have a credit card that you simply don’t use, you may be tempted to cancel the account. However, this is actually the opposite of what you should do, mostly because of the way your credit score is determined.
The first detail to understand is the fact that the average length of your credit history makes up 15% of your FICO score. Closing accounts not in use will shorten this average, and thus it can work against you in terms of your score.
Second, you should know that the amounts you owe in relation to your credit limits make up another 30% of your FICO score. This is often referred to as your credit utilization.
When you close an account that’s no longer in use, you’re reducing the amount of credit available to you, which could increase your utilization into a range that could hurt you. Most experts suggest keeping your credit utilization below 30% for the best results, which means you’ll maintain $3,000 in debt or less for every $10,000 in open revolving credit available to you.
Consider downgrading your card
Some consumers decide to close accounts they aren’t using in order to avoid an annual fee, but this is not always required. Depending on your card issuer, you may be able to downgrade the credit card you have with an annual fee to a different card product that doesn’t charge one.
To downgrade your credit card to a no-fee option, call your card issuer using the number on the back of your credit card and ask.
What to do with expired debit and credit cards
If your credit card or debit card is the regular plastic kind and it is past its expiration date, getting rid of it is pretty easy. All you have to do with expired credit and debit cards is cut them up with scissors and throw them away in the trash. Some paper shredders also have a slot for credit and debit cards that makes it easy to destroy them along with other important documents you no longer need.
Disposing metal credit cards
Most metal credit card issuers will destroy your card if you send it back to them. If you would like a prepaid envelope sent to you to mail yours back, or if you want the best address to send it to, call the number on the back of your card to make this request. Thanks to a newly announced recycling program, American Express will even recycle your card if you mail it back to them.
If you don’t want to mail your card in and you live near a branch, you may also be able to drop your credit card off for disposal. Local bank branches may not destroy metal credit cards themselves, but they will know where to send them.
Join the world of expired card hobbyists
Interestingly, expired credit cards have become a collector’s item of sorts — at least for some people. There is even an American Credit Card Collectors Society whose stated purpose is to “be a resource for the credit card collector and a communication link for members.”
According to the group rules, older cards are generally worth more money, as are cards in excellent condition that have never been signed. Rare credit cards are also worth more in general, and especially if they feature a celebrity or have something special about them.
Your expired Chase Freedom® may not be worth a premium, but who knows? If you stick your old cards in a sock drawer long enough, perhaps they’ll be worth something someday.
How to find old credit card accounts
Here’s another question you may find yourself asking: What if you have open credit card accounts you forgot about? Without a physical card, it can be difficult to remember the details, like your account number, the type of card you had or the card issuer.
To find old credit card accounts, you should start by looking at your credit reports. Head to the website AnnualCreditReport.com, which will let you access your reports from all three credit bureaus — Experian, Equifax and TransUnion — for free.
Once you have your credit reports, you can look them over for old accounts you may have forgotten about while you check for accuracy overall. If you find you have credit cards you’ve forgotten about, you can decide whether to call the card issuer to ask for a new physical card — or to do nothing at all.