Getting rid of old Credit Cards

[PricklyPete]

Ok...I have heard that getting rid of old Credit Cards is not the best thing to do credit wise. My question is how long does this affect you and to what degree.

Currently I have 4 credit cards. None of them are carrying a balance. One is a best buy card and the others are just from various banks. I have had one since I was 18 (1997) and the others I got while in college (somewhere around 2000-2001). Anyway, I am thinking of getting a new GM Card to earn money toward a new truck, but don't want all of these cards floating around.

I was going to go ahead and apply for the GM Card, close the two newest credit cards (2000 and 2001) and go along my merry way. I am not planning on buying a truck or house anytime in the next 6 months. Will I be good to go in 6 months?

 

[GeneralDisarray]

I think the reason they say canceling them is bad is that your credit score is affected by how long you've had credit. So keep the oldest one, cancel the other ones you dont use.

 

[MikePanic]

your better off canceling your current cards and getting one, or keeping one that you will use from time to time... def get rid of the best buy one

get a card w/ a low apr and something in return, like the gm card you mentioned.

try to float at least a $100 balance on the card a month... even if its just a pair of sneakers or you picking up the tab for dinner one night a month w/ some friends.

even people w/ HORRIBLE credit who have 2 credit cards that each have 100-250 balances on that they pay the min balance on per month (which ends up turning that $100 purchase into about a $160 purchase over a few months after intrest) for one full year will improve your credit score enough to the point where in most places of the country you can get a 200k+ mortgage for a house

having several cards w/ no balances scares off lenders, like car finacers and mortgage brokers because they see it as a security risk and are afraid you will go out and run them up..

so yes, by all means get rid of them and have one credit card you use and keep a balance, even if its nominaly small on, and perhaps a 2nd that you keep just for emergency

 

[PricklyPete]

Originally posted by: MikePanic
your better off canceling your current cards and getting one, or keeping one that you will use from time to time... def get rid of the best buy one

get a card w/ a low apr and something in return, like the gm card you mentioned.

try to float at least a $100 balance on the card a month... even if its just a pair of sneakers or you picking up the tab for dinner one night a month w/ some friends.

even people w/ HORRIBLE credit who have 2 credit cards that each have 100-250 balances on that they pay the min balance on per month (which ends up turning that $100 purchase into about a $160 purchase over a few months after intrest) for one full year will improve your credit score enough to the point where in most places of the country you can get a 200k+ mortgage for a house

having several cards w/ no balances scares off lenders, like car finacers and mortgage brokers because they see it as a security risk and are afraid you will go out and run them up..

so yes, by all means get rid of them and have one credit card you use and keep a balance, even if its nominaly small on, and perhaps a 2nd that you keep just for emergency

My credit is fine at this point. I'm not so much looking for a way to increase my credit...I just do not want to damage it by cancelling cards if I don't have to. My main question is how long will cancelling the cards hurt me credit wise and to what degree. I have the best buy card for the occasional 0% interest on something. Of course I haven't used it forever...but I keep it just in case.

 

[LordJezo]

Originally posted by: MikePanic

try to float at least a $100 balance on the card a month... even if its just a pair of sneakers or you picking up the tab for dinner one night a month w/ some friends.

eek..


so you actually carry a balance over each month?

way to go! better you helping the cc companies make money then me.

 

[MikePanic]

well i have been caught in a pinch here and there (like when my car broke down 3 hrs from my house and i didnt have enough cash on me to stay in a hotel that night or tow it home) - but if you buy something on a credit card and pay the full balance off in less then30 days, it doesnt help your credit rating at all

yes the banks make money off me... but i also have some of the highest limits (should i ever want to use them) of any of my friends in the same age group and one of the best credit ratings i could have for my age - so in the long run, when i go to buy a house or a 60k car (should i ever want one) i wont have to worry if my credit is good enough or not

 

[PricklyPete]

Originally posted by: MikePanic
well i have been caught in a pinch here and there (like when my car broke down 3 hrs from my house and i didnt have enough cash on me to stay in a hotel that night or tow it home) - but if you buy something on a credit card and pay the full balance off in less then30 days, it doesnt help your credit rating at all

yes the banks make money off me... but i also have some of the highest limits (should i ever want to use them) of any of my friends in the same age group and one of the best credit ratings i could have for my age - so in the long run, when i go to buy a house or a 60k car (should i ever want one) i wont have to worry if my credit is good enough or not

I am no credit guru (obviously since I'm asking this question), but I know plenty of people with large credit limits and multiple cards who never carry a balance and have stellar credit. I have never read anywhere that you have to wait till the CC company makes money off of you before it helps your credit. Maybe someone with some actual credit knowledge will chime in.

 

[Jzero]

Originally posted by: MikePanic
well i have been caught in a pinch here and there (like when my car broke down 3 hrs from my house and i didnt have enough cash on me to stay in a hotel that night or tow it home) - but if you buy something on a credit card and pay the full balance off in less then30 days, it doesnt help your credit rating at all

yes the banks make money off me... but i also have some of the highest limits (should i ever want to use them) of any of my friends in the same age group and one of the best credit ratings i could have for my age - so in the long run, when i go to buy a house or a 60k car (should i ever want one) i wont have to worry if my credit is good enough or not

Simply not true. I have carried a balance two months on my main credit card out of the 6 years I have had it. The limit is $13k these days. I have not had trouble getting an auto loan or a mortgage. If you want to donate money to the credit card company, knock yourself out, but it's not doing anything for you other than wasting money.

If you want to improve your credit rating, always pay on time, that's the best thing you can do.

 

[Beattie]

Originally posted by: LordJezo

Originally posted by: MikePanic

try to float at least a $100 balance on the card a month... even if its just a pair of sneakers or you picking up the tab for dinner one night a month w/ some friends.

eek..


so you actually carry a balance over each month?

way to go! better you helping the cc companies make money then me.

What he said was that you should purchase things with the card, not let it idle. Not that you should carry a balance.

 

[Kelemvor]

The more AVAILABLE CREDIT you have, the lower your score is. It doesn't matter if you have a balance, it matters that you have the POTENTIAL to use all of your available credit.

It's best to not have extra cards open that you don't use except if they are store specific cards that you use for financing specials and things. It's also not good to have multipel cards with very high credit limits that you will never use.

For a loan/mortgage company, they will add up whatever the TOTAL available credit is on your cards and take that into their calculations. because the day after you get a loan, you COULD go and max out all your cards and you'd be screwed.

HOWEVER, when you do call to close a card, specifically tell the person to note your account as "Closed Per Customer Request" so it shows that on the credit report. That wya they know you asked for it ot be closed and it was closed by tghe CC company.