dreamer100
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| Credit Card Question |
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I was recently told that one of my credit cards will be cancelled in a month by the credit card company because I haven't used it for some time. I have not had any late payments. I have a few questions.
1 - From a credit rating standpoint, is it better if I cancel the card before they plan to or does it matter?
2 - Will this in any way effect my credit rating?
Thanks in advance.
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Mon Nov 30, 2009 4:49 pm |
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littleroc02us
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My personal opinion is who cares! So, what if you lose the card, just continue to live your life not using credit as much as possible. Yes it will affect your overall available credit and your credit score, but there are other ways to improve your score, by paying other bills on time for example.
“If you want to stay in debt forever, keep borrowing money.”
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Wed Dec 02, 2009 3:50 pm |
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iwillguide
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| hi |
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its better not to use credit cards ..
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Wed Dec 02, 2009 5:45 pm |
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Greer
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I agree with littleroc02us, if you are not using it then you should definitely make the most of other ways to improve your credit rating, and spare yourself the hassle of that particular credit card.
Greer
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Wed Dec 09, 2009 11:34 pm |
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muaz alwi
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Better cancel that credit card and use debit card.
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Sun Dec 13, 2009 1:30 pm |
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Elmira Nancy
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you can better use debit card only
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Tue Jan 19, 2010 10:07 am |
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littleroc02us
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Remember the FICO score is based on an "I Love Debt Score". So, you must borrow money and pay it back to have a good score. Good luck on your choice.
“If you want to stay in debt forever, keep borrowing money.”
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Tue Jan 19, 2010 2:21 pm |
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cicredit
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Whenever you pay of a credit card. Always keep the card open do not shut it down because that can hurt you. Just keep the card open and don't use it.
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Thu Feb 11, 2010 7:04 am |
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alexender
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It is better not to use credit cards as it a source by which people get looted for a huge amount. It is wise not to use credit cards as it just gives you a very less amount of benefits.
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Thu Feb 11, 2010 9:57 am |
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AlFromLA
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to my best underestanding, is that you don't want to close any accounts if you are not using it unless you are paying some sort of annual fee. If its free don't close it because that helps you with debt to income ratio.
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Mon Mar 01, 2010 5:25 pm |
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Creditnet_com
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It would be better for you to close the account yourself, but even if the creditor closes it, your payment history will show no lates and that the account was in good standing.
Yes, it will hurt your credit score for a period of time. How much it lowers your credit score depends on how long you've had that credit card and what percentage of your total credit limit the said card makes up.
For example, let's say I have 2 credit cards, both with a credit limit of $5K; this means my total credit limit is $10K. I use only one card each month and I charge a total of $2,500 on it (and pay if off in full, of course!). My credit utilization is 25% ($2,500 divided by $10K). If the credit issuer of my unused card closes my account, my total credit limit is now only $5K and my monthly credit utilization is 50% ($2,500 divided by $5K). Not good, way to high! A lower credit score will reflect this high utilization ratio.
Also, your credit score will be affected if this is one of your oldest cards because it could substantially lower your age of credit.
If there is no annual fee associated with the card, then consider keeping it open. Call the credit card company and let them know you'd like to start using the card and they'll likely keep it open. If you're okay taking a hit to your credit score, then close the account, and work on building up your credit score another way.
Here's a tip written by a credit expert on Creditnet.com on how to decide whether to keep or close a card:
http://www.creditnet.com/articles/how-to-deal-wth-new-annual-fees.php
Creditnet.com: Credit FAQs, blog and more
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Wed Mar 03, 2010 8:01 am |
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