| Help on Cancelling Credit Cards |
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lytung
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 29 May 2005
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| Help on Cancelling Credit Cards |
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I have total of 4 credit cards w/ low limits. I opened them to help me boost my credit score. I had bad score (mid 500s) so I had to pay Annual Fee. Is it a good idea to pay to keep these credit cards? Also, recently my credit increased due to on time payment so my score is around 600. I got a card offer w/o annual fee with very low limit but a good rate (8.99%) so i cancelled one card w/ fee. Should i cancel all the other ones? or keep 2 cards total?
I heard that cancelling card will actually lower your credit score, but is paying $50 a year a good idea? I just need some advice since i hear mix advice about cancelling credit cards with fee. My ultimate goal is to get my credit score up.
ANy advice/suggestion is appreciated..thank you.!
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Sun May 29, 2005 5:52 am |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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Some things that factor in are length of good payment history and debt to credit ratio. So for now you might want to at least hang on to the oldest card until you build up a history with your free card for a couple of years and start getting other offers. If you close all of your old cards that you have been making prompt payments on, your only good payment history would be the period of time of the new account.
But if you carry a balance, and closing some old cards would increase your total debt/credit ratio too much, that may not help.
You might be able to get an idea what effect these would have by honestly answering the questions of one of the FICO score simulators. You just have to realize what the terms mean and that eliminating an account with good history eliminates that history, possibly resulting in a shorter history and less credit (higher debt/credit ratio). But eliminating an account with late payment history is not going to make it go away until its time.
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Mon May 30, 2005 8:54 am |
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networking101
Member
Cash: $ 1.02
Posts: 12
Joined: 02 Jun 2005
Location: US
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Hello lytung,
Depending how long you have had these credit cards you may want to cancel a few of the them (the ones with the annual fee). If you have had these accounts open for over 18 months and have not been using them you should consider closing them. Or consider cancelling all of them (if they have been over 18 months) keep the one you just resently got. Wait for a few months and request a credit limit increase for the no annual fee card you have. You having one card with an adaquate credit limit and maintaining a good payment history is better then having multiple cards with annual fees and not using them. Hope this helps out.
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Fri Jun 03, 2005 6:41 am |
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