Credit Card Question ?

BOOMSHAKER · Oct 10, 2008

I know we have some very knowledgable people on this board so I figured I would ask here.

I am getting ready to pay off 2 credit cards. I have had one for over 6 years. The other for 2 years. I have repeatedly asked my CC companies to give me a better rate but in these times they won't budge. BUT, it's no big deal. I want to pay them off completly, but my question is should I close them out or leave them open?( i will not use them after they are paid off and the CC company will close them due to inactivity anyway) If I close them myself will it drop my credit score or is that a myth the CC companies give you so as to keep them open?

Thank you....

Pekkerwood · Oct 10, 2008

Absolutely positively leave them open. They willl help with the age of your credit which is an important component. Also having the available credit lines with zero balance will help you with your ratio of credit available to credit used. You want this to be under 35% for the best credit score.

Now if you have ten or more other cards you have had for 7 years it will effect you less because you will have plenty of "aged" credit.

Pekkerwood

cslim · Oct 10, 2008

Definitely leave them open especially if you only have 2! BUT, cut up the cards

Great job on paying them off!

buffbabeca · Oct 10, 2008

yup definately keep it open... i work for a credit card company. if you want to you can always request to lower the credit line and yes always try and keep your outstanding balance below at least 50% but 35 % is better. once y
ou get over the 50% mark it shows as a negative on your credit report....

any other questions feel free to pm me

cpesloco · Oct 10, 2008

Keep them open and put them in a safe place in case of an emergency. The cc company will not close them. It only makes your credit that much better this way.

BOOMSHAKER · Oct 10, 2008

Thanks everyone. I only have 2 cards. And the credit line is very low.(this is of my own doing) I guess the reason why my CC companies won't lower my rate is because they want me to increase my credit line. I do not like buying things on credit. But had these 2 cards for emergencies. So the general thought is to keep them open. So that's what I'll do. Thanks again folks.

p.s. Becca have you seen more cards lately being closed out and paid off because of the current economy?

cpesloco · Oct 10, 2008

nothing wrong with having them raise your cc line; however, in this day and age they prob will not raise it. Credit is strict right now.

BOOMSHAKER · Oct 10, 2008

cpesloco said:
nothing wrong with having them raise your cc line; however, in this day and age they prob will not raise it. Credit is strict right now.

True that. But I know I can't be trusted with a higher CC line. And knowing this is the reason why I have told them for years now NOT to raise the line. I had jacked up credit for years. And about 6 years ago I cleaned it all up and have A+ now. Sometimes my female side comes out and I want to shop shop shop! bahahahaha (sorry ladies)

buffbabeca · Oct 10, 2008

BOOMSHAKER said:
Thanks everyone. I only have 2 cards. And the credit line is very low.(this is of my own doing) I guess the reason why my CC companies won't lower my rate is because they want me to increase my credit line. I do not like buying things on credit. But had these 2 cards for emergencies. So the general thought is to keep them open. So that's what I'll do. Thanks again folks.

p.s. Becca have you seen more cards lately being closed out and paid off because of the current economy?

its kinda been 50/50..we have lots of customers who use their cards to their benefit for example if its a rewards card they use it for everything then pay in full every month and never pay interest and get rewards also. we also have lots of people who sadly are living on their credit cards , paying their mortgages with them car loans with them you name it. we have a lot of customers who are calling in about financial stress and asking for a break , we have a dept especially for that but one KEY thing to keep in mind is balance transfers. I get 50% of my calls a day asking about "this cc company is willing to give me 0% for 12 mos" and they dony realize that once they lose that 0% it will be a jacked up apr of like 15%. It also can hurt your credit it keep transfering balances because all credit companies talk and you can be labeled a "chronic surfer"

Sassy · Oct 21, 2008

buffbabeca said:
its kinda been 50/50..we have lots of customers who use their cards to their benefit for example if its a rewards card they use it for everything then pay in full every month and never pay interest and get rewards also. we also have lots of people who sadly are living on their credit cards , paying their mortgages with them car loans with them you name it. we have a lot of customers who are calling in about financial stress and asking for a break , we have a dept especially for that but one KEY thing to keep in mind is balance transfers. I get 50% of my calls a day asking about "this cc company is willing to give me 0% for 12 mos" and they dony realize that once they lose that 0% it will be a jacked up apr of like 15%. It also can hurt your credit it keep transfering balances because all credit companies talk and you can be labeled a "chronic surfer"

I'm guilty of surfin' lately.

Normally I only keep 2 credit cards and they are both paid off. I use only one of my cards and it gets paid off each month. Last year when Everlast bought the new building, we never dreamed that it would take so long to sell our houses. I needed the money from the sale of my house for the kitchen appliances, but my house still hadn't sold. Home Depot was offering the 0% interest for 12 months, so I took them up on the offer. The houses in my neighborhood were selling in 30 to 90 days... well it's been on the market for 1 yr & 10 months. I had to transfer the balance over to another credit card, and I found one with 0% for 12 months. I know credit cards hate that, but I had no choice. We're making 3 house payments right now, and I'm barely affording the credit card payments w/o interest. When the offer is up, I'll transfer it to the card with the lowest interest rate offer.

subby · Oct 22, 2008

I just went over this in my personal money management class at college. It is recommended to have 2-3 credit cards. One with a very low APR and one with Cash rewards(American Express). It is recommended to have two cards in case you travel over-seas just in case they do not except one.(Also recomended to call cedit card company and inform them you plan on traveling).
Also...If you have more then 2-3 credit cards.. it is wise to close them out.. but do so over a extended period. Dont close them all in one day. Thus closing them all at once can cause a default on your credit and by keeping them open with a 0$ balance and become a rick.. which can also have a negative impact on your credit score.

My advice.. if you need to consolidate them... find a good card (credit card company that is not in debt ex. visa, master card)...with a 0$ transfer rate and try to pay double the minimum amount due every month if not the whole bill off .

hope this helps