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They have already made reductions on the Rogers card. It used to pay 2%.

There are lots of places where Amex is not accepted. If you go with Amex, you will need at least one additional card.

I find the credit rating agencies so laughably inaccurate that I would be hard-pressed to second guess what they might do.
They have credit cards listed for my spouse that were cancelled by us many years ago; but, for me, they are missing half of my cards.
I suppose you could try phoning them up and asking them what their policy would be in such a situation, but I wouldn't rely on it.

However, we have never had any negative effect that we knew of from cancelling cards.
My suspicion is that the credit rating would not be affected. However, you may have to check to make sure the cancellation is recorded as being initiated by you, not by the credit card company.

Loonie said
I find the credit rating agencies so laughably inaccurate that I would be hard-pressed to second guess what they might do.
They have credit cards listed for my spouse that were cancelled by us many years ago; but, for me, they are missing half of my cards.
I suppose you could try phoning them up and asking them what their policy would be in such a situation, but I wouldn't rely on it.

However, we have never had any negative effect that we knew of from cancelling cards.
My suspicion is that the credit rating would not be affected. However, you may have to check to make sure the cancellation is recorded as being initiated by you, not by the credit card company.  

I have read (ie. Gail Vaz Oxlade, and other well known financial pros) that once you cancel your card, my understanding is that all the credit history disappears with it. That is why I read on Gail's website that you shouldn't cancel the card, simply cut it up, but only problem is the card I was to get rid of has annual fee, otherwise I would have done so. If all the credit history disappears, this is especially not good if you're planning on taking out a loan, which I plan to buy a property, but not anytime soon.

The other thing I read was that it would only take a few months of using the new card to get back to your original score, but I don't know how trust worthy that is. A few months to return to the same credit score that took you years on your previous card?

I've also been told that if you stay within the same family of cards, ie. cancel old Amex card and get a new Amex card, then, although the old card gets cancelled, this will not affect your credit score. I'm not sure how accurate this is, especially considering if you cancel a card with an annual fee and get a new card with no annual fee, how accepting would the card company be.

I think Norman is correct. However, if you want to get a new credit card, one of the things they look at is how much credit you already have available to you, whether you're using it or not. If your available credit is at or near the maximum that they think you should be allowed, considering your income and debt obligations, then they would be less inclined to give you the new card that you want.

I have sometimes switched cards within the same issuer. It was done easily over the phone and I didn't have to submit a new application. I presume no further credit check was done as I was not looking for extra credit, merely a different card.

moneyhelp said

Norman1 said

That is not correct. Cancelled credit cards still appeared on my credit record. They are recorded there as closed. History for a credit card does not disappear immediately after it is closed.

Gail Vaz Oxlade's article Should You Close Your Credit Card Account? says that cancelling a credit card may cause a short term drop in credit score.

I think the reason for that is closing a card reduces the total credit available. That causes an increase in credit utilization, which is credit actually used divided by total credit available.  

…

So, yesterday I took upon myself to call Transunion, and what they told me was the following:

They said that if your account (credit card account) is positive (not in delinquent status) after cancelling the card, the credit history stays on your account for 20 years. If the account was in default/delinquent status it stays on the account for a shorter period (he didn't say how long, but at the end, he said he "believed" it was 6 or 7 years).

He did say that closing the account WILL negatively affect your credit score, for the reasons you outlined above (credit utilization). I also asked about the short-term dip that Gail mentions. The CSR of Transition didn't sound convincing, but he did share my concern that he doesn't believe it will go down for a short-term if it took years of building your credit with one credit card, but he also didn't offer a timeline. So, my personal opinion in this is, getting rid of the credit will affect credit score negatively, be short term or longer, and if you plan to take out a loan, then play it smart and be strategic, meaning either take the loan and secure your rate and then cancel the card or cancel the card and wait (how long I don't know but certainly not months - I don't think) until your credit score builds up again.

As I said, if the card I wanted to get rid of didn't have an annual fee ($65 Amex Platinum AirMiles card) then it would be a non-issue, just cut up the card and ignore it, or just buy one thing per year just to keep the card active so it doesn't get cancelled for inactivity; that's why I'm considered switching to the non-annual fee card moving forward, so I don't find myself in the same predicament.  

Twotons said
I would suggest that you get your actual credit score from trans union. If you have an excellent score, above 750 out of 900 then the slight drop in your score will have no impact in the lending process. An excellent rating is an excellent rating; the specific score becomes irrelevant.  

I agree, but there are too many unknowns. I have a 734 score (checked through Borowell) and although my score is quite good, the question is how much of a dip would I get and for how long and there's no clear answer, even from Transunion. Haven't tried Equifax though.

Norman1 said
The dip in score is from increased utilization. That can be fixed by reducing utilization. In other words, paying down outstanding balances.

If one were utilizing $5,000 of $20,000 of total credit limit (25%) and cancelled a credit card with a $5,000 limit, the utilization will rise to $5,000 / $15,000 = 33.3%. One can bring it back down by paying off $1,250. That will result in utilization of $3,750/$15,000 = 25%.   

Thank you for the explanation. I'm aware of the credit utilization's impact on one's credit score and I agree paying off the balances will reduce this or of course increasing the credit limits of your current cards. But the question really is how much of a dip and for how long?

Some say using the new card and paying your balances in time should bring your score back to where it was before cancelling your old card, but I question if that's indeed correct. My common sense instinct says no, but of course I really don't know.

And I agree how these credit reporting agencies arrive at their scores or interpretation of the rating is really unclear. For example, someone who's credit utilization is higher on credit card due to making only minimum payments on loans will have a better rating than someone who pays their loans in full each month. Doesn't make sense to me, but I understand why that is.

Norman1 said
One could pay down first before cancelling. Utilization would drop from the payments. Utilization would return to normal after the cancellation.

I don't think someone who pays credit cards in full each month would have a lower credit score than someone who just pays the minimum payment each month. I don't think the credit reporting agencies and their scoring can tell.

The credit card issuer could tell the difference. But, not the reporting agencies.

The credit cards on my credit report show

1. credit limit,
2. current balance,
3. highest balance,
4. minimum payment required, and
5. monthly status for the past two years.

When a $1,000 balance is reported to the reporting agency each month with status of OK, I may be spending $1,000 each month and paying it off next month. Maybe, I'm spending $50 month, carrying $1,000, and paying $50 + interest each month.  

I'm not sure myself, it was my understanding after reading several articles from Gail's website or other sites, since those carrying over a balance each month would be more profitable to banks/credit card companies. Nonetheless, I never carry a balance. Would rather be a few points shorter and have no debt rather than paying over 20% interest.