Credit Card Question

[judasmachine]

I have about two, maybe three more monthly payments till the credit card I'm getting rid of is paid off. I was wondering if I should wait until I've paid it off to physically destroy the card. I'm going back to having just one for ease of management. I'm good with my credit and don't make late payments, and have only carried a balance on this one card. I just threw that in so that I don't get the "get rid of all of them!" responses, as I know how to manage them.

 

[alimoalem]

i wouldn't destroy it till it's paid for. that's just me though

 

[judasmachine]

Yeah I'm just getting anxious to cut her up. I know not to cancel the account until it's paid off, as there are penalties.

 

[compuwiz1]

Originally posted by: judasmachine
Yeah I'm just getting anxious to cut her up. I know not to cancel the account until it's paid off, as there are penalties.

Don't ever cancel a credit card. Just don't use it. If cutting it up keeps you from using it, then great, cut it. Available credit and a seasoned account makes your credit rating stronger.

 

[judasmachine]

Originally posted by: compuwiz1

Originally posted by: judasmachine
Yeah I'm just getting anxious to cut her up. I know not to cancel the account until it's paid off, as there are penalties.

Don't ever cancel a credit card. Just don't use it. If cutting it up keeps you from using it, then great, cut it. Available credit and a seasoned account makes your credit rating stronger.

Thanks, I should have known that.

 

[compuwiz1]

I have one credit card that I've had for almost 10 years. It's not the most attractive card, but I keep the line open. When it renews, I will usually charge a couple things on it, then pay the balance in full, or over a couple months. Once I've cycled it a couple times, I just cut the card and pretend like it doesn't exist, until the renewal card comes.

Cycled means, to run your card from zero to close to max, and back to zero again.

 

[Dulanic]

Originally posted by: compuwiz1
I have one credit card that I've had for almost 10 years. It's not the most attractive card, but I keep the line open. When it renews, I will usually charge a couple things on it, then pay the balance in full, or over a couple months. Once I've cycled it a couple times, I just cut the card and pretend like it doesn't exist, until the renewal card comes.

Cycled means, to run your card from zero to close to max, and back to zero again.

I still have a 10 year old Capial One "card" that got restricted 9 1/2 years ago when I missed a payment. To this day they refuse to unrestrict it, not that I care it still shows active on my credit report and shows perfect payment history now

 

[shocksyde]

sockdrawer!

 

[FoBoT]

if you are going to close the account, chop it up, no need to wait

 

[Strk]

How much does closing an account ding your credit report anyways?

 

[crt1530]

There is no good reason to close a credit card account. You do need to make a purchase every 6 months to 1 year to keep the account active. A 99 cent pack of gum will work. Learning to use credit responsibly is much better in the long run than swearing it off as "the devil."

 

[VTHodge]

Originally posted by: Strk
How much does closing an account ding your credit report anyways?

Not really a "ding", but credit scores include your total debt-to-credit ratio and the age of you credit history. If you have a $1000 balance and have 2 cards with $5000 limits, your ratio is 0.1. If you close a card, you double your ratio to 0.2. If you close your oldest credit account, then your total "credit history" gets shorter.

 

[dullard]

Originally posted by: VTHodge
Not really a "ding", but credit scores include your total debt-to-credit ratio and the age of you credit history. If you have a $1000 balance and have 2 cards with $5000 limits, your ratio is 0.1. If you close a card, you double your ratio to 0.2. If you close your oldest credit account, then your total "credit history" gets shorter.

You got two of the factors. Also include:
(3) The number of credit lines you have matters. If you close everything, you'll eventually go back to the state of no credit history. No history is almost as bad as a bad credit history. You need a few open lines to avoid this problem. 3-5 is good for most people. Fewer will harm and more does no good. Note: this 3-5 number includes all forms of loans (credit cards, car, etc).

(4) At least one of the credit scores is benefitted by having one account at $0. Note: paying a CC off in full often doesn't leave your balance at $0, because you probably charged something for the next billing cycle before your payment kicks in. So if you close too many accounts, you'll never get this small bonus because you'll never have a CC at $0.

 

[shocksyde]

BEST CREDIT RESOURCE EVER

 

[judasmachine]

Originally posted by: shocksyde
BEST CREDIT RESOURCE EVER

bookmarked, thanks.

i guess for now i'll sock drawer it, i'll just stop reading the cpu and video boards. that way it'll never get used.