The Hidden Costs of Holding On to Old Credit Cards
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Here's your money briefing for Wednesday, May 5th. I'm J.R. Whelan for The Wall Street Journal. They say breaking up is hard to do. Turns out that goes for credit cards, too. A lot of people are still holding on to their first credit card they ever got. Sure, it might have some sentimental value, but is it giving you the best benefits?
Some cards aren't as competitive. They might not be offering you as much, which is making people kind of rethink, you know, what is this doing in my wallet?
But is getting rid of that old credit card the smart option? Coming up, our personal finance reporter, Amber Burton, shares how you can hold on to an older credit card and still reap rewards. That's after the break.
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We've talked on the show before about how a lot of people were using their stimulus payments to pay down credit card debt. And a lot of other people are still holding onto old cards they barely use. So after paying off an old card, what's next? Should you keep it, cancel it, or something else? Our personal finance reporter Amber Burton is here to talk through the options. Amber, thanks for being with us.
Thank you for having me.
All right, Amber, you're on our personal finance team, but I want you to put on your unofficial psychologist hat for just a moment. You've heard from people both before and after your story on this subject ran who are still holding on to their very first credit card even years later. Why do they seem to get so attached to their first card?
Absolutely. Always happy when I can try to put on a psychologist hat. Well, it's emotional. As you know, I think a lot of people can remember, you know, applying for their first credit card and even that first purchase they made with that first credit card. I spoke to different people, but I also always am paying attention to the conversation on Twitter. And it was so fun to see people just remembering the first big purchase they made, whether it was good or bad, they can remember it. And it sticks with them, whether they keep it or not.
And just to clarify, these are folks that have gotten other cards over the years too. It's not just the only one, right?
No, not at all. Far from the only credit card they have. Experian, the credit reporting agency, they found in their data that millennials, which are between the ages of 24 and 39, they have about three credit cards on average. And that's not even as much as baby boomers. Baby boomers have about... four to five cards on average. So, you know, they're kind of collecting cards as they go, finding different credit card offers that fit different needs, and they're holding on to them.
And those newer cards often come with lower fees or better benefits and rewards.
It's become a very competitive business. And so different cards are going to have different offers. Some have no fees at all. Some have, you know, rewards that might enable you to go, you know, take a flight somewhere at a very low cost.
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