My Best Buy credit card- is it obsolete now? - myFICO® Forums - 6732333
Should I close my BestBuy Credit Card? Will it affect my credit score and history? - Personal Finance & Money Stack Exchange
Is it worth getting the best buy card?
Best Buy just upgraded my card automatically?
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I'm thinking of getting the best buy card so I can pay overtime because I have a large university purchase but idk if it's worth it.
There is no harm in keeping the card open, as long as there are no annual fees attached to the card and you have the discipline to not use it (for reasons I will explain in a moment). That being said, the affects of closing the card aren't as drastic as Chad alluded to either. I'll attempt to offer some solid clarification.
For starters, "retail cards" (store cards) are generally not that well regarded by the FICO scoring system as it prefers credit cards over retail cards. This type of credit you have only makes up 10% of your score, so not a significant portion (and you'll improve this by transitioning to a credit card if you already haven't).
The only immediate impact you can have as a result of closing this card is in an area called utilization, which accounts for 30% of your score. The important question becomes: How much of your total credit is wrapped up in this $4K limit? Also, how much of a balance do you typically carry on your other cards in proportion to this total aggregated limit? The FICO scoring model prefers you to keep your utilization under 10%. If your utilization will still be under 10% after closing this account, your report will have no impact whatsoever in the immediate term.
The account will still report positive information on your report for 10 years, helping the 35% payment history category, and will help your Average Age of Accounts, which is 15% of your score, during the entire period. If you open a new card around the same time to replace this card it will age up while this card ages down causing a net neutral impact on your report.
So, basically, the answer to your question is "it depends." If your utilization number won't skyrocket your report won't be negatively impacted and you should close the account without a second thought. If your utilization will be impacted severely I would recommend you open a new account at a credit union, as MrCrister suggested, or request a Credit Line Increase on an existing account that you intend to keep.
I recommend you read the information from Fair Issac regarding the FICO scoring system that most lenders use. There are a lot of misconceptions about what impacts your score.
Scoring breakdown for reference:
(Chad has a very reasonable answer, but my opinion is different. The technical answer he provided is good for me. I dispute the value of a store card on your credit report whatsoever, but I think it varies from card to card.)
Get rid of that card! While we can calculate the numbers and worry about your credit score, the fact that you said it entices you to spend more than you would otherwise means you need to get rid of that card.
Try and get a credit union to give you a real credit card but even if that doesn't pan out, dump that card and remove the weak spot.
(By the way, I speak from a sympathetic perspective. I have done similar things in the past and I love visiting places like Best Buy and shopping just to have it. You brought it up which makes me assume you have some buyers remorse from time to time. Get rid of the trouble.)