Cancel Credit Card?

Discussion in 'Community Discussion' started by benlee, Sep 29, 2007.

  1. benlee macrumors 65816

    benlee

    Joined:
    Mar 4, 2007
    #1
    I was wondering if anyone knows what is best for ones credit. I have a card that I never use anymore (the 0% expired). I was told by someone not to cancel it and to just leave it open and cut up the card. (apparently its better for your credit). However, I have two other cards (0% introductory) and perhaps another one when one of those runs out of it introcutory period. I always pay them off before accuring any interest. But I'm wondering what is best for my credit score.

    Thanks
     
  2. Sun Baked macrumors G5

    Sun Baked

    Joined:
    May 19, 2002
    #2
    Aren't there some sites that deal with raising your credit score, and how to deal with unused credit balances.

    Seems like there were a lot of them during the housing frenzy.
     
  3. jng macrumors 65816

    jng

    Joined:
    Apr 6, 2007
    Location:
    Germany
    #3
    Say you have two cards, card A with a $1000 limit and card B with a $500 limit. With both cards, you amount of credit available to you is $1500.

    If you cancel card B, you then only have $1000 in credit available to you, down from $1500 which can hurt your credit score.

    I had to close an a credit card because of fraudulent activity and the banks have to tell the credit bureaus that the card is being closed for security reasons and that the decrease in credit should not affect my record and score.
     
  4. Maxiseller macrumors 6502a

    Maxiseller

    Joined:
    Jan 11, 2005
    Location:
    Little grey, chilly island.
    #4
    It doesn't hurt your credit score to close an account, but lenders do see the amount of credit you currently have available to you.

    If you have say £1000 of credit, but have only used £100, and always pay your bills on time (whether or not you pay a minimum amount or the full balance) they will see you as a good client.

    The more credit you have that is unspent, the more trustworthy you appear - you have considerable spending potential, but don't exercise that potential thus are in control of your finances.

    They also see any current account overdrafts etc.

    My advice is that you've been granted the credit, keep it.

    To keep my cards active, I make a point of making a purchase that I'm going to pay off every now and again to keep the account active. Of course this is a bonus if your card earns you any reward points or cashback.
     

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