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I would maybe just keep that credit card open for another year or two, but don't use it. I don't know how much closing it will hurt your credit score, but it will hurt it. Especially if it's your only non-store credit card. I would just wait until you've had a chance to establish credit with the other card before closing your current one.
I second 2PeasinaPod - it will definitely hurt your credit score to close it but I don't know how much or for how long (and that probably varies for every individual situation to be totally honest). I'd keep it open for a while longer and just not use it while you use the new card instead.
I remember from another post that you aren't happy with Key, so I get why you'd want to close the card, but if you can avoid it, I wouldn't. I think something like 15% of a FICO score is based on age of your accounts.
Maybe you could just put the card away and not use it? Just think, Key will still have administrative costs to keep your account open and you will not be earning them any money. (Yes, I realize I'm evil.)
EDIT: Your score is also based partially on your use of available credit. So if you have a $10,000 limit on the Key card and get a new card with a $10,000 limit, you have $20,000 in available credit. If you have a $1,000 balance (even if you pay off every month, a purchase will show as a balance in the month it is made) you are using 5% of your available credit. If you close the Key account and then have only $10,000 of available credit, you would then be using 10% of your available credit. A lower percentage also helps your score.
@Neva: I never thought of it that way! I'm sure a few of my credit cards that I no longer use are cursing me right now! (I'm evil too!)
Agree with everyone, just don't use it. You can even cut it up if you want to but don't close the account.
FH had a card and they closed it for not being active anymore which hurts your credit score more then if the consumer closes it. That's why I was thinking about closing it vs them closing it when I dont use it anymore :/
I also have a mortgage and all the household accounts are in just my name.
@mishelleez: If you have to keep it active, use it a couple times a year and just pay off the balance at the end of the month while continueing to use the new card for everything else.
@Neva: My limit is only $500 on my key card. I dont want a CC that has a limit that is more then I can pay off every month. I like to shop :)
@mishelleez: Maybe you should check with Key to see what their policy is on that. I have a VISA that I've not used in more than ten years that is still open. I keep it deliberately because it has a $30,000 credit line and I've had it fifteen years, so it helps my score to have it.
I did have a store credit card close out an account I didn't use once. I'm guessing every lender has its own policy.
DH had a credit card that he got at college when we was 18. He never had possession of the card and it was a $50 yearly fee with only a $500 limit. I cancelled it and it dropped his credit score 100 points!
I would just be careful if you are going to make any major purchases like a home, car etc. right now because it could really hurt your potential interest rate. Also just note that your credit is also depends on how long your credit history is. You might want to wait until you establish credit with other cards before cancelling.
My dad is in finance so he helped me with a plan to increase DH's score and get it back up to where it was. It took about 18 months.
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I had a post earlier about closing my bank accounts and my credit card is also with key bank that I plan on closing too.
This card is the only non store card I have and I've had it since I was 18. I have excellent credit and already applied & got approved for a new card elsewhere. I never keep a balance on my CC's.
How much is it going to hurt my credit score and how long will it hurt it?