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Old 02-20-2014, 09:22 PM   #1
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Does closing a credit card hurt a credit score

ive recently paid off all but 2 credit cards.Now i have almost zero c/c debt,from about 10k.Thats huge for me.Im thinking about closing the accounts.Is that a good idea,how will it effect my score?
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Old 02-20-2014, 09:33 PM   #2
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Simple answer is no. You have to look at the whole picture. Leaving the card active improves the debt utilization meaning you have used less of what is available to you. But, having too much available to you can cause some concern for some creditors as you could easily use that available credit after they have accepted you as a debtor. Personally, I have a large amount of credit available to me with very little owing. I have no credit card debt with only about 6yrs left on my mortgage, new 5yr car loan for the Jeep, about 10k on a line of credit for my wife's Journey that we just bought last summer. I have roughly 85k available to me without factoring in home equity. I have an exceptional credit rating. Just using some numbers for perspective. They look at the history as well as the current state of your finances.

I would leave it active if it isn't a temptation.

Edit: Sorry, more important than what I said before is Congrats!! I know the feeling... enjoy it!
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Old 02-21-2014, 12:07 PM   #3
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Great job getting things reeled in!

As Gord stated, leaving the revolving credit accounts open with little to no balance is often better than not having many sources of credit on record. The best thing to do is use them a little bit now and then and pay off the balance before you get any interest accrued for a balance. This builds positive credit through positive payment history.

That said, too much revolving credit can cause concern for some loan applications - like if you've never gotten a mortgage and have a lot of credit cards (even with low-to-0 balance) they may think "this person may go max their cards as soon as they get the loan and blow out their debt-to-net ratio": application = DENIED

Credit scores have a lot of factors to them - not just a matter of how much you owe now and if you've missed payments.
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Old 02-21-2014, 12:16 PM   #4
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Congrats.

I battled dept myself, bankruptcy and worked myself out of it. Starting off was the hard part, Signing for those high interest, annual fee cards like First premiere bank. It cost me $15 a month to hold a 0 balance not counting the money to activate the card. I asked the same questions online. Eventually closing that card and another. My credit score never dropped, it only got better with time.
Toss those cards and keep only the good ones IMO
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Old 02-21-2014, 04:43 PM   #5
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The answer is no!
But every time that you open a new card, your credit score will drop some points!

If at all possible in life, if you can't pay cash for it, then do you really need it?
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Old 02-22-2014, 09:12 PM   #6
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Thanks everyone.I bought my house a little over a year ago.Still have good credit( about a 688) and hopefully paying these cards off will increase it.
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Old 02-22-2014, 09:27 PM   #7
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Quote:
Originally Posted by 1jeeplvr View Post
Thanks everyone.I bought my house a little over a year ago.Still have good credit( about a 688) and hopefully paying these cards off will increase it.
It absolutely will. And, if you're like me, you will have more difficulty spending money when you look at the money you're no longer spending on interest. It's addictive.

Again, good on you.
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Old 02-23-2014, 01:22 PM   #8
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Quote:
Originally Posted by Gord P View Post
It absolutely will. And, if you're like me, you will have more difficulty spending money when you look at the money you're no longer spending on interest. It's addictive.

Again, good on you.
I might spend the money thinking of all the interest Im saving lol.
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Old 02-23-2014, 04:47 PM   #9
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I might spend the money thinking of all the interest Im saving lol.
At least it wouldn't be going towards nothing.
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Old 03-04-2014, 05:09 PM   #10
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Just tossing this suggestion out there too...

Stop using debit cards or checks and start using credit cards with good rewards. If you can get a nice cash back reward based credit card with enough credit available to easily pay your monthly bills... then use that and pay the credit card off each month. You can easily make a couple hundred bucks a month on rewards if you can pay your mortgage, auto loans and insurance with it, not to mention food/fuel/entertainment. Most bills and utilities allow payment with credit cards... so use them up!
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Old 03-04-2014, 05:39 PM   #11
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Just tossing this suggestion out there too...

Stop using debit cards or checks and start using credit cards with good rewards. If you can get a nice cash back reward based credit card with enough credit available to easily pay your monthly bills... then use that and pay the credit card off each month. You can easily make a couple hundred bucks a month on rewards if you can pay your mortgage, auto loans and insurance with it, not to mention food/fuel/entertainment. Most bills and utilities allow payment with credit cards... so use them up!
X2, I make money on this every month. Just pay off the credit card, so that you don't pay any interest, but they will pay us in points, for using it! It's a win, win, to do this!!!!!!!!!
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