• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Credit help - Keep or eliminate my credit cards?

P

Praetor

Diamond Member
Credit cards, love 'em or hate 'em. If you frequent our Hot Deals forum, chances are that you love 'em. 😉

Recently, I managed to secure a loan from the bank to eliminate my credit card debt, my hospital bills, and my car loan. Instead of having 8 creditors that I owed money to, I now owe only 3, 2 of which are student loans with insanely low APRs that I am positive I can eliminate on my own before the end of the year.

My question is what should I do with my now-paid-off credit cards? I have six cards now, with over $16,000 in available credit at interest rates from 15% to 20.9% (!) One was 8.9% but spiked to 20.9% now that I don't have my original balance transfer on it.

To top it off, I was given a $3,000 line of credit by the bank as overdraft protection for my loan. I have absolutely no intention of using it, but everyone knows what happens with the best of intentions.

I'm young, 23, and I carry some hefty debt. If all goes according to plan with two job interviews on the way, I can get it all paid off within a year. Do I destroy and return these credit cards and hope that should I ever need them, I would be approved for a new credit card in the future with better rates? Should I argue for better rates on all the cards now and keep the one that will give me the best deal? Or should I just hand them over to you guys, let you rack them up off the Hot Deals forum and claim that the numbers were stolen and let everyone enjoy the best of both worlds? 😉

Advice or suggestions are appreciated! 😀
 
Haha. 😛 With the exception of my current debt ratio (which, again, I plan to have corrected within a year at the earliest), my credit record is excellent, now spotless according to all three of the major credit bureaus.

<edit>
Besides, the entire point of giving away the numbers would be so I could report them as stolen and not have to pay for the stuff! 😛 (which, for the record is a joke, so all FBI agents back off!)
 


<< I have absolutely no intention of using it, but everyone knows what happens with the best of intentions. >>



Boy do you have that right!



<< Do I destroy and return these credit cards and hope that should I ever need them >>



Only if you're smart. 😉

Seriously, in our society, having a credit card (or a charge card) is a necessity. You need it to reserve hotel rooms, book flights, and order stuff mail order.

I would suggest that, at the LEAST, you cut up all of your cards but the one with the lowest rate. Call the credit company and insist that they lower your credit limit to a level you know you can handle.

Even better, get a charge card such as AmEx. Since the total balance is due each month, one month of insane speding is all you need for a serious reality check.

I have one credit card. I've had it since I was 18. (I'm now 29.) I got myself in debt in college and have since bailed myself out. One smart thing that I did was, years ago, I called the credit card company and said, &quot;stop raising my credit limit!&quot; So I have one card with a $1000 limit. When I hit that limit, I stop spending. I use it in a pinch, but am trying to discipline myself not to use it at all.

One thing is certain: if you leave those cards in your wallet, you will double your financial troubles.
 
Get rid of the cards. Keep 1 for emergencies. Too many cards affects you ability to get loans. Your disposable income (calculated, say, for a mortgage) is reduced by what the minimum payment would be on all of your cards if they were maxed out.
 
You can call customer service and ask for a better rate. It has always worked for me. I buy everything with a credit card even food at the supermarket but I ALWAYS pay it all every month. I have seven or eight cards I only cary two at a time.
 
I have a Visa/check card from my bank that draws off of my checking account that I absolutely adore. I've used the poor thing to death and I'm anxiously awaiting my new one that'll arrive in a few months. (So I can wear THAT one to death!) I had done an excellent job of controlling my debt up to last year when a few major crisis' came up requiring their use, and that's when I said &quot;screw it&quot; and used 'em. Hey, I already owed them money, why not make it more? 😉

So far, the consensus is to eliminate all but one. Keep the ideas flowing! 🙂
 
I say at least keep a couple, they are handy at the gas station (but DO remember to pay them off please).

And as mentioned, a CC is a necessity. You may need it for emergencies, and just use it occationally to keep your credit rating in check. Use responsibly and you really don't have to worry about it (yes, i know it's easy to say 🙂).

But yeah, go from the highest APR to the lowest, calling to say you want your rates lowered or you'll cancel your account.
 
I say keep two credit cards, preferrably the ones which meet the following criteria:

1) Low rate.
2) No annual fee.
3) Perks, rewards such as Sony card, GM/Ford card, 1% rebates, miles, etc.
4) High limit, because it's a pain in the a$$ to call and have them raise your limit.

The most important advice is to have the admin BAN your entire ISP from looking at the Hot Deals forum then your dilemma will be solved. Hmmn come to think of it maybe I should do that.
 
Call each credit card company and keep only the one that lowers the rate. If it's not at least 9.9 or lower then get rid of it. If you have good credit trust me other companies will find out and send you offers for lower interest rates. Don't settle. Get the best, low rate possible. But Do not keep several cards. If you are not diciplined you will get yourself in trouble. Also keep in mind if you keep several around the house/apartment you are taking a risk. I found that one out. Got robed and they stole the credit cards I had in my dresser drawer.
 


<< The most important advice is to have the admin BAN your entire ISP from looking at the Hot Deals forum then your dilemma will be solved. Hmmn come to think of it maybe I should do that. >>



ROFL 😀 That was priceless, RossMan! 😛



<< If it's not at least 9.9 or lower then get rid of it. >>



Hrm... Then that would leave me with zero credit cards. Good for keeping money, bad for the computer. 😉 Seriously though, eliminating the highest apr is a good idea. I think I'll start with the Sears and Target cards that I acquired for their initial discounts....
 
Sears and Target cards are department store specific cards, those I would feel are exempt from the &quot;only keep 2 credit cards&quot; suggestion I made. Of course this doesn't mean you should have 1 GAP, 1 Old Navy, 1 The limited, 1 BP gas card, 1 Texaco gas card, 1 Chevron gas card, 1 Sears, 1 Wards, 1 JC Penney's, etc. department store cards.

IMHO the only department store card worth keeping (unless you're a clothes shop-a-holic) is Sears. Several times a year they run good specials on electronics, appliances and home improvement. Something like 10% off, no interest for 1 year, etc.

So keep only 1 gas card, 1 department store card and 2 regular Visa/MasterCard cc's.
 
keep TWO, one in your wallet (so to speak) and one as a backup. Make them from different providers. Use the one as necessary and pay it iff every month. Keep the other as a backup in case of emergency (such as having the first card cancelled because of theft at the worst possible moment). As long as there is no annual fee and you keep the max amounts down, there is no problem
 
Just make it a rule to pay off your balance every month. This means that you never charge anything that you wouldn't be able to pay for with a check. Then, it doesn't matter how many credit cards you have.
 
yeah, i'm stuck w/ some high rate ~20%.. prolly cause my age and the fact i don't have a job (in school).. i really don't know how i got approved for all the credit line i have 🙂 I've been a bit behind sometimes (damn expensive school books.. 🙁). I need to take my own advice and call to get these things lowered......
 


<< Then, it doesn't matter how many credit cards you have. >>



Not true. Unless one has an exceptionally high income, having a lot of credit cards, even with a zero balance will negatively impact the credit rating.

Praetor,

If your goal is to maintain, and enhance your credit rating, you will need to keep a couple of the revolving accounts open. Potential creditors like to see a variety of types of credit. In addition, Cancelling them all at once is a red flag.

Russ, NCNE
 
MWilding:

Is that true that they calculate Loans based on your Credit Limit for other cards, not just other balances?

If so, I did not know this.
 


<< MWilding:

Is that true that they calculate Loans based on your Credit Limit for other cards, not just other balances?

If so, I did not know this. >>


Absolutely!

If you have 3 cards with $10,000 limits and want to get a mortgage, they protect themselves by giving you a mortgage that you can pay off even if you run up the credit cards. Having a lot of cards is NOT a good thing. You need two cards. One of which is only for emergencies like car accidents or unexpected home repairs. The second is the one you use regularly. Any more is just asking for trouble.

I don't count a debit card (and neither does the bank).
 
Keep the best one with the best perks. Pay it OFF every month!!!!!!! That way you can get air miles or something like that.

Keep one for things that you want to buy on credit for the long term that has the lowest rate. Know that you willing to pay intrest for large purchases but PAY it OFF!!!! Then buy sonething else big once you do.

This will build all of the credit you need except for property.


 


<< Cancelling them all at once is a red flag. >>



Ahh.. Now that's something that I had not considered at all. Would one card a month be too much too fast?

If I did it that way, I would be able to call each in turn and give them a period of time to lower the APR to an acceptable level before I cancelled their card. Good/bad idea?

Thanks for the advice thus far! 😀
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top