Unused credit cards: Closed or open?

Strider · 07-20-2006, 09:28 AM

My wife and I are currently working on wiping out our consumer debt, and I was wondering if it was better to close the cards, once the balances were down to nothing. I'm not worried about using them again, since we're pretty fiscally responsible.

Thoughts?

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OriginalSin · 07-20-2006, 09:28 AM

Jard · 07-20-2006, 09:30 AM

Keep them open. A long and good credit history with each financial institution is important to maintain.

One good thing to do is to call and have the limits capped at $5k if it's a card you are not using. Having too much open credit will hurt you.

vile · 07-20-2006, 09:31 AM

keep open for now, rules tend to change....it used to be that closing was the way to help out your credit score

EnforcerPSU · 07-20-2006, 09:47 AM

It won't hurt you at all to keep it open. In fact, if it has a low interest rate it might save you someday when you need it. If there is no balance then your credit report will show the card as open, but it has little to no effect on your score.

LucKie355 · 07-20-2006, 10:03 AM

I'd keep a couple open for emergencies.... but I think it's actually bad to have too many credit cards with open balances. Something to do with risk...I can't remember the term the banks use, but basically even though you're not in debt, you've got enough credit open to get into lots of trouble.
I only have a skymiles amex that has enough of a limit on it that I really don't need any other cards. I do have a couple store cards that i'll use for a sale, and then do a second transaction to pay it off.

-K

elsanto · 07-20-2006, 10:04 AM

keep them open and use them all.. having multiple open lines of USED credit looks good on your report, just dont get out of hand with them.

Protege Menace · 07-31-2006, 02:25 PM

Ok question.

Ive had my banks credit card for like 4 years now with perfect credit on it.

in april I got a bestbuy credit card and bought my pojector (6 months no interest) and paid it off in 3 months. I canceled the card once it was paid off.

I want to use the free yearly credit check to see the current status, how long does it take for **** to be put into the credit history?

pityr · 07-31-2006, 02:30 PM

ussually creditors report to the CRAs every 30 days or so.

beethoven · 07-31-2006, 02:36 PM

Quote:

Originally Posted by elsanto

keep them open and use them all.. having multiple open lines of USED credit looks good on your report, just dont get out of hand with them.

Yea, that would be incorrect. You don't need to use the cards.

WRXVT · 07-31-2006, 02:39 PM

leave some open....

kaisersouse · 07-31-2006, 02:42 PM

open CC accts looks like a loan when it comes to credit scoring. Good that its a line of credit in good standing...bad that it adds to the debt side of your debt/income ratio (regardless if the card has a balance or not)

nKoan · 07-31-2006, 02:42 PM

Yeah, like people have said leave one or two open, but don't leave them all open (if you have more).

Having open lines of credit is good for you, but too many open credit cards are also bad for you.

Protege Menace · 07-31-2006, 02:44 PM

Ive had my one bank CC open for 4 years and have no plans of closing it, only the shady ass HSBC one.

wrxfactor · 07-31-2006, 02:51 PM

Closing the accounts will up the percentage of credit you are using. For example, if you owe 20k but have cards totalling 100k limit, closing 50k worth of them will change the amuont of credit you're using from 20% to 40%, not a good idea. Leave them open, unless you only owe like 10k and have 200k available. If that's the case, capping them like Jard suggested is a great idea.

pityr · 07-31-2006, 02:55 PM

go to http://www.privacyguard.com/ and sign up for thier service. Its $1 for the first 2 months. They have a "what if" score calculator that allows you to see what would happen if you closed a LOC or just paid it down.

express_wagon · 07-31-2006, 03:28 PM

Hijack...related question:

Bank of America issued me a CC but I never activated it, does it still consider as open?

E-TOX · 07-31-2006, 03:35 PM

Unless you're looking to finance a home or car in the near future, stressing over your credit rating now is overkill.

i would close any open cards except for those you use regularly. Keeping them because of a great rate makes no sense since the rate will inevitably change w/ the times (even the "fixed" ones). Fixed just means not variable NOW, but later they reserve the right to change it.

By closing unused cards, they reduce identify theft risk a bit, especially since they may be off your radar.

Also, note that a lot of department store cards do not necessarily close your account even when you request it. So it's worth double checking. I had MAcy's close my account only to find it's still open years later when I did a check.

For those owning a house, excess consumer debt or risk (open cards) don;t help since your rating is mainly dependant on your house payments.

These are my thoughts...I'm no expert but I've had some bouts w/ credit when I bought our house.

zmaster · 07-31-2006, 03:42 PM

do not close them all at once...close one every three months or something like that...cos if you close off all of them at once ..it looks quite suspicious to the agency...

WRXVT · 07-31-2006, 04:13 PM

Quote:

Originally Posted by kaisersouse

open CC accts looks like a loan when it comes to credit scoring. Good that its a line of credit in good standing...bad that it adds to the debt side of your debt/income ratio (regardless if the card has a balance or not)

Are you sure? I thought having a cc with no balance does not impact your debt/equity. I'm 99.99% sure of this.

balbino · 07-31-2006, 04:43 PM

Keep them open. If you think you lack will power mail them to me and Ill keep them safe.

dubitancy · 07-31-2006, 04:46 PM

Close them all!!!!!!
Run away!!!!!!!!! Run away!!!!!!!!!

07-20-2006, 09:28 AM	#1
Strider Visiting NASIOC Timeout Member#: 2197 Join Date: Aug 2000 Chapter/Region: Tri-State Location: An adventure is just Vehicle: an inconvenience, properly considered.	Unused credit cards: Closed or open? My wife and I are currently working on wiping out our consumer debt, and I was wondering if it was better to close the cards, once the balances were down to nothing. I'm not worried about using them again, since we're pretty fiscally responsible. Thoughts? * Registered users of the site do not see these ads.

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07-20-2006, 09:28 AM	#2
OriginalSin Scooby Newbie Member#: 66341 Join Date: Jul 2004 Chapter/Region: South East Location: a fool's parade

07-20-2006, 09:30 AM	#3
Jard Scooby Guru Member#: 34935 Join Date: Apr 2003 Chapter/Region: MAIC Location: Silver Spring, MD Vehicle: Dad- Core OG	Keep them open. A long and good credit history with each financial institution is important to maintain. One good thing to do is to call and have the limits capped at $5k if it's a card you are not using. Having too much open credit will hurt you.

07-20-2006, 09:31 AM	#4
vile Scooby Specialist Member#: 32371 Join Date: Jan 2003 Location: formerly known as mem. # 10615 Vehicle: '02 t-rex wagon platinum	keep open for now, rules tend to change....it used to be that closing was the way to help out your credit score

07-20-2006, 09:47 AM	#5
EnforcerPSU Scooby Newbie Member#: 76849 Join Date: Dec 2004 Chapter/Region: MAIC Location: Erie, PA Vehicle: 2011 WRX Rally Blue	It won't hurt you at all to keep it open. In fact, if it has a low interest rate it might save you someday when you need it. If there is no balance then your credit report will show the card as open, but it has little to no effect on your score.

07-20-2006, 10:03 AM	#6
LucKie355 Scooby Newbie Member#: 116540 Join Date: Jun 2006 Chapter/Region: NESIC Location: Central MA Vehicle: 2005 Acura TSX Cat lady extraordinaire!	I'd keep a couple open for emergencies.... but I think it's actually bad to have too many credit cards with open balances. Something to do with risk...I can't remember the term the banks use, but basically even though you're not in debt, you've got enough credit open to get into lots of trouble. I only have a skymiles amex that has enough of a limit on it that I really don't need any other cards. I do have a couple store cards that i'll use for a sale, and then do a second transaction to pay it off. -K

07-20-2006, 10:04 AM	#7
elsanto Scooby Specialist Member#: 34832 Join Date: Apr 2003 Chapter/Region: Tri-State Location: was once a nut like me. Vehicle: 1989 M3 White	keep them open and use them all.. having multiple open lines of USED credit looks good on your report, just dont get out of hand with them.

07-31-2006, 02:25 PM	#8
Protege Menace Scooby Specialist Member#: 41950 Join Date: Aug 2003 Chapter/Region: International Location: www.faqurug.com Vehicle: faq u rug	Ok question. Ive had my banks credit card for like 4 years now with perfect credit on it. in april I got a bestbuy credit card and bought my pojector (6 months no interest) and paid it off in 3 months. I canceled the card once it was paid off. I want to use the free yearly credit check to see the current status, how long does it take for **** to be put into the credit history?

07-31-2006, 02:30 PM	#9
pityr Scooby Specialist Member#: 31719 Join Date: Jan 2003 Chapter/Region: NWIC Location: Portland	ussually creditors report to the CRAs every 30 days or so.

07-31-2006, 02:39 PM	#11
WRXVT Scooby Specialist Member#: 17979 Join Date: Apr 2002 Chapter/Region: MAIC Location: NOVA Vehicle: 335i Blue	leave some open....

07-31-2006, 02:42 PM	#12
kaisersouse Scooby Specialist Member#: 85900 Join Date: Apr 2005 Chapter/Region: NESIC Location: Maine Vehicle: 2001 Forester S White	open CC accts looks like a loan when it comes to credit scoring. Good that its a line of credit in good standing...bad that it adds to the debt side of your debt/income ratio (regardless if the card has a balance or not)

07-31-2006, 02:42 PM	#13
nKoan Scooby Specialist Member#: 38189 Join Date: Jun 2003 Chapter/Region: BAIC Location: Reno, NV Vehicle: 05 Legacy GT Garnet Red Pearl	Yeah, like people have said leave one or two open, but don't leave them all open (if you have more). Having open lines of credit is good for you, but too many open credit cards are also bad for you.

07-31-2006, 02:44 PM	#14
Protege Menace Scooby Specialist Member#: 41950 Join Date: Aug 2003 Chapter/Region: International Location: www.faqurug.com Vehicle: faq u rug	Ive had my one bank CC open for 4 years and have no plans of closing it, only the shady ass HSBC one.

07-31-2006, 02:51 PM	#15
wrxfactor Scooby Specialist Member#: 49978 Join Date: Dec 2003 Chapter/Region: NESIC Location: Shrewsbury, MA Vehicle: 2002 WRX w/ JDM STi 6spd, EJ255, VF39 & EWG	Closing the accounts will up the percentage of credit you are using. For example, if you owe 20k but have cards totalling 100k limit, closing 50k worth of them will change the amuont of credit you're using from 20% to 40%, not a good idea. Leave them open, unless you only owe like 10k and have 200k available. If that's the case, capping them like Jard suggested is a great idea.

07-31-2006, 02:55 PM	#16
pityr Scooby Specialist Member#: 31719 Join Date: Jan 2003 Chapter/Region: NWIC Location: Portland	go to http://www.privacyguard.com/ and sign up for thier service. Its $1 for the first 2 months. They have a "what if" score calculator that allows you to see what would happen if you closed a LOC or just paid it down.

07-31-2006, 03:28 PM	#17
express_wagon Scooby Specialist Member#: 68346 Join Date: Aug 2004 Chapter/Region: NESIC Vehicle: 2004 Tacoma 2015 GX460	Hijack...related question: Bank of America issued me a CC but I never activated it, does it still consider as open?

07-31-2006, 03:35 PM	#18
E-TOX Scooby Newbie Member#: 31208 Join Date: Dec 2002 Chapter/Region: BAIC Location: Cali Vehicle: 02 WRX Wagon Smart ones get the wagon	Unless you're looking to finance a home or car in the near future, stressing over your credit rating now is overkill. i would close any open cards except for those you use regularly. Keeping them because of a great rate makes no sense since the rate will inevitably change w/ the times (even the "fixed" ones). Fixed just means not variable NOW, but later they reserve the right to change it. By closing unused cards, they reduce identify theft risk a bit, especially since they may be off your radar. Also, note that a lot of department store cards do not necessarily close your account even when you request it. So it's worth double checking. I had MAcy's close my account only to find it's still open years later when I did a check. For those owning a house, excess consumer debt or risk (open cards) don;t help since your rating is mainly dependant on your house payments. These are my thoughts...I'm no expert but I've had some bouts w/ credit when I bought our house.

07-31-2006, 03:42 PM	#19
zmaster Scooby Specialist Member#: 88995 Join Date: Jun 2005 Chapter/Region: RMIC Location: Denver Vehicle: 11 WRX Premium True Subaru color WRB	do not close them all at once...close one every three months or something like that...cos if you close off all of them at once ..it looks quite suspicious to the agency...

07-31-2006, 04:43 PM	#21
balbino Scooby Newbie Member#: 13794 Join Date: Jan 2002 Location: Indiana Vehicle: 2005 Ford f150 blue	Keep them open. If you think you lack will power mail them to me and Ill keep them safe.

07-31-2006, 04:46 PM	#22
dubitancy Scooby Newbie Member#: 65655 Join Date: Jul 2004 Chapter/Region: Tri-State Location: Glastonbury, CT Vehicle: 2004 WRX & 2011 STi www.send-a-brick.com	Close them all!!!!!! Run away!!!!!!!!! Run away!!!!!!!!!