question about closing credit cards down....

courtneyh · Jun 26th, 2008, 09:41 AM

I just paid off some of my credit cards.... Kohls, Gap, Best Buy..... I dont want to keep the cards because I dont want to put money on them anymore..... I only want to buy things from now if I have the cash.

So my questions is will it hurt my credit if I close down these accounts or is it better to keep them open and just not use them???

Myblackbag · Jun 26th, 2008, 09:48 AM

Yes, closing them will hurt your credit score. It is best to just cut them up and not use them again.

courtneyh · Jun 26th, 2008, 09:51 AM

Quote:

Originally Posted by Myblackbag

Yes, closing them will hurt your credit score. It is best to just cut them up and not use them again.

why does it hurt your score? i am wondering this because if im not using the card and there is no balanace and the account is still open, whats the difference by closing it?

uafly1 · Jun 26th, 2008, 09:52 AM

Well it's not good to close your oldest card, it's what creates your credit history.
Closing your cards will ding your credit report,becasue it will lower your amount of available credit to you. Not using them can also hurt you, because it shows that you have all that available credit that can be utilized at any given time.
It's a catch.
I closed down everything but 1 visa a few years back. I am not sure how it immediately affected my score, but it was fine about a year later when I went to purchase a car, in fact it had gone up about 40 points.

courtneyh · Jun 26th, 2008, 09:57 AM

these cards arnt any of my 1st cards opened.....i have a master card that was one of my 1st cards open that I am keeping.....

im just so confused.... i dont want to hurt my credit score because its slowly getting better and better so I dont know which option is the best....... i feel like its worse to have accounts open that are dormant???

uafly1 · Jun 26th, 2008, 10:18 AM

Part your credit score is made of your credit history. So leaving a card dormant, will still show your credit history.
Check out www.myfico.com they have some interesting tips.

leothelnss · Jun 26th, 2008, 10:30 AM

The age of your credit improves your score, right? So keeping the cards for a long time looks good, just store them away somewhere and don't use them. Or use them once a year and pay them off immediately.

LadyLinda · Jun 26th, 2008, 11:24 AM

You might keep one or two store cards, if you use them, but close the other store cards, particularly if you have a lot of them. Don't close any major cards, though, because those bolster your credit record far more than those store cards. Here's an article with some good pointers.

http://articles.moneycentral.msn.com...IsTooMany.aspx

twiggers · Jun 26th, 2008, 12:35 PM

Here is the lowdown:

What is good for your credit is:

Overall average age of your credit. This is calculated by averaging the age of all of your cards. They will factor in how long overall you have had credit, but it's mostly the average.

Paying on time.

Not opening a lot of cards.

No inquiries.

Low credit utilization (want this number under 10%). This number is calculated by dividing the amount you owe by your total available credit.

So.....if these cards are relatively newer cards then you won't drastically hurt your credit. In fact, if they are really new they are probably hurting the average age of your credit.

However, if you still owe money on your other credit cards, then closing these would hurt your credit utilization %.

So, the bottom line. Only close the accounts that are really new, and only close them if you owe zero debt.

fieldsinspring · Jun 26th, 2008, 01:18 PM

Closing them will probably lower your score a little.. but I have to say before we built our last house we had a LOT of cc debt and we paid it all off and I closed ALL of the cc accounts.. when we went in to close on the house (3 months later) I was told by our mortgage lender that I had one of the highest fico scores he had ever seen.. so obviously it helped us, I guess because we had so much debt to income ratio.. if you can you can just cut them up (after writing down account #, phone #, etc) and not use them.. the debt to income ratio affects your credit, but also when buying a house and the like they also don't like you having a lot of available credit because you can go and charge that right away and be more in debt. Bottom line is do what works best for YOU.. GL and congrats on paying off the cards!

socalgem · Jun 26th, 2008, 02:27 PM

You should have a store card to mix with your credit cards. And closing older cards makes your credit history change, which isn't a good thing.
You can keep the cards open and not use them. Cut them up if that is a challenge for you.

This is the breakdown on FICO scores:

35% Payment History
30% amount owed
15% length of credit history
10% new credit
10% type of credit used

guccimamma · Jun 26th, 2008, 03:55 PM

i closed down all the silly store-cards that i had in my past...like the banana republic card from 1998...pottery barn... (why would i have done this?) in order to pare-down my credit report.

if you have silly cards that you won't be using, i say just close them. it may affect your score for a short-term, but if you are getting rid of debt...and not applying for anything in the near future, i don't think it will harm anything..especially if the credit limit on them is not terribly high.

there is something to be said about simplifying all of it...it may be worth the short term dip in your credit rating...i'd probably do it.

but we keep our old gas card (even though i want to close it down, i hate mobil card) because it is our oldest credit card, and therefore by closing it...we shorten our credit history to our next oldest card.

courtneyh · Jun 26th, 2008, 09:56 PM

thanks everyone so much for all the advice....

i think im going to close down the newest cards...and keep my oldest ones open

Jahpson · Jun 27th, 2008, 12:48 PM

When i paid off my department store cards, I decided not to close them since that would alter my credit scrore.

So what did I do? just cut the card up.

purse-n-boots · Jun 28th, 2008, 01:46 AM

I haven't read all the responses but yah - keeping a couple of the oldest ones or the ones with the largest available balance would be the best bet. The score is calculated on length of accounts and also the ratio of credit you use. Of course, at some point after you have too much credit it would hurt your score but since you already had them I'm sure your score is fine.

Perhaps close the newer one and one with the lowest credit line. That will free up some potential credit for a bigger purchase later on.

Jun 26th, 2008, 09:41 AM	#1
courtneyh Just Married!!! Joined: Oct 2006 Location: Bucks County! Posts: 2,274	question about closing credit cards down.... I just paid off some of my credit cards.... Kohls, Gap, Best Buy..... I dont want to keep the cards because I dont want to put money on them anymore..... I only want to buy things from now if I have the cash. So my questions is will it hurt my credit if I close down these accounts or is it better to keep them open and just not use them??? __________________ My small but growing LV collection! Mono Speedy 25 Cabas Piano Damier Zippy Wallet Damier Key and Change Holder My Wishlist! Damier Neverfull MM Something in Azur

Jun 26th, 2008, 09:57 AM	#5
courtneyh Just Married!!! Joined: Oct 2006 Location: Bucks County! Posts: 2,274	these cards arnt any of my 1st cards opened.....i have a master card that was one of my 1st cards open that I am keeping..... im just so confused.... i dont want to hurt my credit score because its slowly getting better and better so I dont know which option is the best....... i feel like its worse to have accounts open that are dormant??? __________________ My small but growing LV collection! Mono Speedy 25 Cabas Piano Damier Zippy Wallet Damier Key and Change Holder My Wishlist! Damier Neverfull MM Something in Azur

Jun 26th, 2008, 10:30 AM	#7
leothelnss Loves sales... Joined: Jan 2008 Location: Burtonsville, MD Posts: 2,216	The age of your credit improves your score, right? So keeping the cards for a long time looks good, just store them away somewhere and don't use them. Or use them once a year and pay them off immediately. __________________ I have a nice collection (finally) So I guess it's time for me to get picky & have a wishlist... 1. Hayden Harnett Havana Hobo 2. Carrie Valentine Confidence Clutch 3. Linea Pelle Angie 4. Kale Tate 5. Rebecca Minkoff Morning After

Jun 26th, 2008, 12:35 PM	#9
twiggers Earning my PhD Joined: May 2006 Location: The Library Posts: 20,118	Here is the lowdown: What is good for your credit is: Overall average age of your credit. This is calculated by averaging the age of all of your cards. They will factor in how long overall you have had credit, but it's mostly the average. Paying on time. Not opening a lot of cards. No inquiries. Low credit utilization (want this number under 10%). This number is calculated by dividing the amount you owe by your total available credit. So.....if these cards are relatively newer cards then you won't drastically hurt your credit. In fact, if they are really new they are probably hurting the average age of your credit. However, if you still owe money on your other credit cards, then closing these would hurt your credit utilization %. So, the bottom line. Only close the accounts that are really new, and only close them if you owe zero debt. __________________ Check out my new blog.....and see how I eliminated $50,000 in credit card debt in just 7 months.... COME JOIN THE COOLEST CLUB AROUND...THE CURBING CONSUMERISM CLUB

Jun 26th, 2008, 01:18 PM	#10
fieldsinspring keepin' it real! :) Joined: Aug 2006 Location: Where the Sun Is! Posts: 6,082	Closing them will probably lower your score a little.. but I have to say before we built our last house we had a LOT of cc debt and we paid it all off and I closed ALL of the cc accounts.. when we went in to close on the house (3 months later) I was told by our mortgage lender that I had one of the highest fico scores he had ever seen.. so obviously it helped us, I guess because we had so much debt to income ratio.. if you can you can just cut them up (after writing down account #, phone #, etc) and not use them.. the debt to income ratio affects your credit, but also when buying a house and the like they also don't like you having a lot of available credit because you can go and charge that right away and be more in debt. Bottom line is do what works best for YOU.. GL and congrats on paying off the cards! __________________ Don't Give up what you want MOST for what you want NOW

Jun 26th, 2008, 09:48 AM	#2
Myblackbag Member Joined: Jun 2006 Posts: 379	Yes, closing them will hurt your credit score. It is best to just cut them up and not use them again.

Jun 26th, 2008, 09:52 AM	#4
uafly1 Member Joined: Nov 2005 Posts: 235	Well it's not good to close your oldest card, it's what creates your credit history. Closing your cards will ding your credit report,becasue it will lower your amount of available credit to you. Not using them can also hurt you, because it shows that you have all that available credit that can be utilized at any given time. It's a catch. I closed down everything but 1 visa a few years back. I am not sure how it immediately affected my score, but it was fine about a year later when I went to purchase a car, in fact it had gone up about 40 points.

Jun 26th, 2008, 10:18 AM	#6
uafly1 Member Joined: Nov 2005 Posts: 235	Part your credit score is made of your credit history. So leaving a card dormant, will still show your credit history. Check out www.myfico.com they have some interesting tips.

Jun 26th, 2008, 11:24 AM	#8
LadyLinda Member Joined: Jul 2007 Location: Philadelphia Posts: 606	You might keep one or two store cards, if you use them, but close the other store cards, particularly if you have a lot of them. Don't close any major cards, though, because those bolster your credit record far more than those store cards. Here's an article with some good pointers. http://articles.moneycentral.msn.com...IsTooMany.aspx

Jun 26th, 2008, 02:27 PM	#11
socalgem Because I can... Joined: Apr 2007 Location: California Posts: 4,462	You should have a store card to mix with your credit cards. And closing older cards makes your credit history change, which isn't a good thing. You can keep the cards open and not use them. Cut them up if that is a challenge for you. This is the breakdown on FICO scores: 35% Payment History 30% amount owed 15% length of credit history 10% new credit 10% type of credit used __________________ Life is too short to drink cheap champagne. Last edited by socalgem; Jun 26th, 2008 at 02:31 PM.

Jun 26th, 2008, 03:55 PM	#12
guccimamma guccimamma Joined: Aug 2006 Posts: 2,859	i closed down all the silly store-cards that i had in my past...like the banana republic card from 1998...pottery barn... (why would i have done this?) in order to pare-down my credit report. if you have silly cards that you won't be using, i say just close them. it may affect your score for a short-term, but if you are getting rid of debt...and not applying for anything in the near future, i don't think it will harm anything..especially if the credit limit on them is not terribly high. there is something to be said about simplifying all of it...it may be worth the short term dip in your credit rating...i'd probably do it. but we keep our old gas card (even though i want to close it down, i hate mobil card) because it is our oldest credit card, and therefore by closing it...we shorten our credit history to our next oldest card.

Jun 26th, 2008, 09:56 PM	#13
courtneyh Just Married!!! Joined: Oct 2006 Location: Bucks County! Posts: 2,274	thanks everyone so much for all the advice.... i think im going to close down the newest cards...and keep my oldest ones open __________________ My small but growing LV collection! Mono Speedy 25 Cabas Piano Damier Zippy Wallet Damier Key and Change Holder My Wishlist! Damier Neverfull MM Something in Azur

Jun 27th, 2008, 12:48 PM	#14
Jahpson I'mma Do Me......... Joined: Aug 2007 Location: The Playground Posts: 9,641	When i paid off my department store cards, I decided not to close them since that would alter my credit scrore. So what did I do? just cut the card up. __________________ View my very own blog and make a comment! Amazingly Sophisticated

Jun 28th, 2008, 01:46 AM	#15
purse-n-boots Member Joined: Mar 2007 Location: Midwest Posts: 681	I haven't read all the responses but yah - keeping a couple of the oldest ones or the ones with the largest available balance would be the best bet. The score is calculated on length of accounts and also the ratio of credit you use. Of course, at some point after you have too much credit it would hurt your score but since you already had them I'm sure your score is fine. Perhaps close the newer one and one with the lowest credit line. That will free up some potential credit for a bigger purchase later on. __________________ www.purse-n-boots.com