I just read another letter about debt consolidation. I am not planning on doing that, but finished paying off a charge card.
Does anyone know if I then close that account if that affects my credit or not? so far I have not...but would like to get rid of it.
Someone told me to just leave it open because it looks good that you paid it off. I just want to get rid of it.
Thank you wonderful people!
Thank you everyone. I decided it will be a good idea from your notes to hang onto it for a bit.
Pick up the book The total money makeover by dave ramsey. It wil not only show you the best way to get out of debt, but it will totally change the way you look at credit and credit scores.
Closing it will drop your score for a while. Your debt to credit ratio will go up, which could hurt you if you are trying to get a loan. I have a card with a super high interest rate, but it is no annual fee and a high credit limit, so I keep it open and charge some small purchase on it each month to keep it active. If you are certain that you won't run up the debt again and it's not costing you anything, I'd keep it open. If there is a chance you will run it up, cancel it immediately. Your credit score isn't worth the credit card debt.
Is this a "charge card" or a "credit card"? There is a difference. A charge card is Diners Club and American Express that need to be paid off in full each month (although AMEX is changing that from what I hear).
If you close a credit card - your credit score might dip for a while. If you own a home and are making the payments - that will keep your credit up...Having it open if you don't own a home will show a payment record if you go to buy a home or a car.
If you want to be a cash only family - it doesn't matter what happens to your credit, right? If you want to be done with the responsibility and have paid it off - close it. Write the company and tell them that you are closing the account. Make sure you send it return receipt requested and check your credit report in 30 to 60 days to ensure that everything is correct on your report.
They do look at credit to debt ratio, so it looks good to have credit when you don't have debt.
Yup, keep it open as long as there are no annual fees.
I am assuming you are talking about a credit card, a charge card would be something like an American Express card which doesn't effect your credit one way or another unless you don't pay and it goes into collections.
I digress....
If it has no annual fees and you have the will power to never use it it is better for your credit score to keep it open. The more unused credit you have access to the better your score is. Even better you charge a tank of gas and pay it off every month. Again depends on your level of will power. :)
Hi,
I did the same thing. It stays on your credit card as good standings it does not hurt your credit. It will be on your credit report for at least 10 years so I wouldn't worry.
yes, closing that card will negatively impact your credit score
Don't close your card, use your card every 6 months. If you don't, your credit card company will close it for you due to inactivity.
The longer a card/tradeline is opened, the more points you get. The second the card/tradeline is closed, your score will drop. Also, don't use more than 25% of your available credit limit.
Do not shut it off. Just cut it up. It's better for your credit to not close the account. They won't send you a bill as time passes.
We stopped using credit cards several years ago, but there are occasions where you need one: renting a car (you never now when you'll be in an accident and need to rent), buying a plane ticket, even when buying gas it's safer than using a debit card if you pay at the pump.
