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~TandemNursingMomma4... | What might this do to my credit score? |
I have a card that is paid off and compared to my other cards, it's limit pales in comparison. I want to close it. However it is one of two oldest accounts. The oldest account has a limit 4X that of the one I want to get rid of and that one is paid off too. Would getting rid of such a small available credit account really do that much to my score either way? Or should I continue to let it sit and use it for holiday shopping like I did this last Christmas? It's annoying to have a credit card that has been increased ONCE since I opened it while the others are increased every 6 months to a year.
Additional Details
The one time they increased my limit- it was b/c I called them. |
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JennyKS
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You will not lose the age associated with the card, but it will affect your utilization, though it sounds like not by much. You will not lose the age, because the issuer will not remove the tradeline from your reports, so it will report there (just closed).
Utilization is what % of your available credit you are using. FICO likes less than 30% best, and I have found my scores to be optimized at around 5-10% utilization.
Personally, I would keep the card open if it is a card issuer that you want to maintain a relationship with. Use it 4-5 times a year to buy coffee, then pay in full. Diversification of cards is not a bad thing, especially in this era of tightening credit. Once you close it, it would probably be harder to get it back if you chose to.
On the other hand, if it does not affect your utilization greatly and you do not care to continue the relationship with the issuer, then close it! It depends on what your ultimate goals are. |
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echo
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An "excellent" answer by JennyKS
I just wanted to add, if you haven't contacted the creditor to ask for a credit limit increase then you might consider doing that.
edit
Call them every 6 months and ask them for a guideline credit limit increase.
To correct some misinformation:
Never request that they lower your credit limit like one poster stated... that would be committing credit suicide
And
Closing a card, that is in good standing, yourself "will" show on your reports as being closed by the consumer. If the creditor closes a card, that is in good standing, it will show as being closed by the credit grantor.
Either way it "will" show who closed it on your reports and it will "not" be considered a negative.
A closed in good standing account will report for 10 years or more from the date it was closed. |
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.
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Closing this card will lower your credit score. Put it away, cut it up, but don't use it. |
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Marc
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here is the thing if they are your oldest cards my freind dont close them as they carry much much history and they were the reason u have other credits now..and when u cancel them ur deleting all the history with them thats mean the the third card u opened is your oldest history dont close them and if u dont want to use them just through them in your drawer they are your best credit cards
whoever tells u it wont effect ur score they are WRONG!!...u will delete all the history its a fact check SUZAZ web site |
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Mamma's Instincts
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I used to be a credit card customer service rep for JP Morgan Chase and am obsessed with my credit report.
It is said that it is better to leave open even if you do not use it because of how long you have had the card for shows responsibility with credit. The best way to do it is lower the limit to the lowest amount they will let you. Most are either $250 or $500. The reason why closing it can be a negitive on your credit report is because it does not say if you closed it or if they closed it. This means the worst case is assumed. It is removed from your credit report even if it was good after 7 years, but 7 years from now if you leave it open even if you never use it again it can be very positive for you. The other thing you could do to improve your credit score if you are concerned with that is take part of the balance from one of the other cards and transfer it to this card. They recommend not exceeding 50% of the available credit after you have maxed out a card once. The reason for this is it shows you are responsible with credit, so even when you get it you use it responsibly. SO if one of your cards is more then 50% transferring some of the balance to this card might actually help your credit. The next bonus to this especially if it is a small amount you are transferring is they might offer you a deal of no interest for 6 months to a year. The goal would be to pay it off before the interest kicks in. Remember there is a fee for transferring the balance from one card to another and it has to be two different companies.
If you want the balance increased they might do this with a request and a credit check. Then the card might be of more value to you. If you use the card and max it out and pay it off in the same months a couple of times then they are also likely to increase your credit without thought or request as they see you are responsible and not exciding your spending capabilities.
Good Luck with what ever you choose. |
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christa
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Well according to Suze Orman (the money lady), she says not to cancel your cards as that will have a negative effect on your rating. Why not just cut it up and throw it away........... |
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TheBigAndy
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I would go ahead and close the card... |
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cj
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close it out |
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psunuc
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You should not have a bunch of open credit cards. That will hurt your credit. Closing an old card won't hurt you at all. It does not disappear from your credit report. It just shows it was paid and closed.
Pick the cards you want to keep based on their interest rate / promotions or options you use. If the limit is not adequate call them and say that you need a higher limit because you are closing competitor accounts. Unless you have bad credit they will up you limit. |
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