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If you close your accounts with a $0 balance will it help or hurt your credit. My husband and I have several accounts between the two of us and I am looking to close some of them. We got quite a few around Christmas time and I figured we would use them more but we don’t. I want to get the ones we rarely use down to a zero balance and close them but i don’t want to do that if it will make our scores drop dramatically. We have both been working hard to get our scores up and right now we are both over the 650 mark. I think I want us to get to where we have no more than 3 cards. I don’t know if that should be together or each but I have read that it is really good to find 3 cards you like and stick with them and not to open any more. Any opinions, ideas, or facts that anyone may know are welcome. Thanks!
Closing a credit card shouldn’t either hurt or help your credit (unless it’s your only card or you have a lot of credit debt).
FICO score takes into consideration something called a “credit utilization ratio”. This ratio basically looks at your total used credit in relation to your total available credit; the higher this ratio is, the more it can negatively affect your FICO score.
It can hurt your score as your credit utilization ratio will rise if you have balances on your other cards, as your total available credit will decrease by closing a line of credit. However, this will change when you bring your balances down. You can also plan ahead and make sure all your balances are close to 0 when you close your cards.
Personally, I don’t see the point of having a lot of credit cards so I’m in your same line of thought. I see people on the myfico.com forums with 7-10 cards (and more!) and I just don’t get it. It’s like they’re obsessed with credit cards. I just want to get to a point where I have excellent credit and can qualify for a mortgage and have the credit that I need.
A credit card or the number of credit cards you have does not define who you are as a person, so having 10 credit cards will not help me feel more accomplished. In fact, I wish I didn’t have to worry about credit at all. Unfortunately it’s not possible.
I think 3 regular credit cards is more than enough for me (I have a store card as well), though I could see myself having more or less at some point, depending on the circumstances. I have 3 right now, but I’m looking to close my secured card next month and get another one to replace it at some point.
I think you have a good plan, 3 each sounds like a good number to me.
If you don’t mind me asking, which cards are you closing and which are you keeping?
I know some people really can get obsessive with having a lot of cards. I think some may even say I fell in to that category at first. I was so happy that I finally started getting approved for unsecured cards, and around Christmas time I figured we would need them, but in reality we really don’t. I have care credit which I will definitely keep. Walmart, Target, Best Buy, J C Penny, Capital One, and I am an authorized user on my husband’s Citi card. At this point I am really only wanting to keep my Care Credit, Capital One, and maybe Walmart. All others I want to pay off and close. I will eventually get another good “universal card and then take myself off of my husband’s citi card. After that I will take a look at this accounts and break his down as well, but he doesn’t have as many as I do.
Yeah, I understand the feeling. Once you start getting approved for unsecured cards, it’s easy to get carried away. Though I have to say that after ruining my credit, I’m now a bit more cautious, or at least I try.
My wife has the Target card as well. We like the 5% off every purchase it has (we shop there all the time). I’ve heard that Walmart offers a free credit monitoring service with its card. Is this true? Walmart is a little farther away from where we live, so we don’t go there as often.
I have a Paypal Smart Connect that I use frequently as I use PayPal a lot. It’s currently the only store card I have. The other one that I wanted was the Amazon card as I buy from Amazon all the time, but now that I have Chase Freedom card I think I probably don’t even need it. That’s the thing, now that I have a good rewards card, most store cards I’ve looked at seem unnecessary.
I am self employed and currently do not have medical insurance, so the Care Credit sounds like a good option. I might look into it. What are the advantages of having Care Credit vs a regular credit card?
The whole reason I got my Target card was because I used to work there. Between the 5% and my discount I used to save 15% every time I bought something. Now that I don’t work there I never shop there; and that is the reason why I want to close it. Walmart offers a free Fico score that updates every month with their card. It is only the Transunion Fico score. Care Credit really doesn’t have a lot of advantages, but it works for me. You can choose between a 12,18,and 24 month period without interest. Also you have to make sure the place where you want to use it accepts it first. For example my Dentist office excepts it but my internal medical dr does not. It is not a logo like a visa or mastercard so that makes it harder, but i have a lot of dental work that needs to be done so it works for me.
12, 18 and 24 months without interest sound like a big advantage over a regular credit card. Where do you apply for it and how has your experience been with care credit? Is it only one company offering this service or do different companies offer it? Do they pull all your credit reports when applying? Do you get credit line increases?
Sorry for all the questions, but I’m really interested in knowing more about it.
http://www.carecredit.com/faqs.html
There is the site for the faq. You can apply online or at your doctor’s office if they accept it. I know they have a search engine to help you find doctors near you that accept you. As far as I know this is the only company like this. I believe they only pulled my Transunion report, but I have had this card for almost 2 years so I cannot really remember. I have had a good experience so far. I have never missed a payment. I have not been given an increase automatically but I think you can request one. My inital limit was 1k and I just haven’t felt the need to increase my limit yet. Maybe the faq can answer any other questions you may have.
Hey Christie,
How did it go closing those credit cards? Just curious to know how it went. Also any news on that collection you were trying to get deleted?
Hey,
Sorry for the late reply. I have been having a lot of things going on lately. I had to delete my old email address so I had to register a new account. I have not closed any cards yet. I am trying to get them all paid off and then decided which ones to close. As far as the other collection I never heard anything else back.
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