Closing a credit card with a balance?

Question

I have a credit card that I just cannot seem to pay off. I've been trying to pay it off for years now and then I seem to spend on it. It's gotten to the point where if I don't close it, I'll never pay it off. Recently I've gone over the limit twice and I want to close it so they don't raise the APR or charge me fees.
I know it's bad to close an account before paying it off...I know that it affects your credit score. Other than my credit rating, what's the worst that could happen? Can they jack up the APR if I close it with a balance?
Thanks!

The reason I want to close it is so that I don't get depressed and spend on it. I'm good at paying the bills...I'm also good at wracking them up again.
Debt is like dieting for me, if it's not available, I won't eat it =/
Thanks for the advice

Answer 1

I am amazed at the amount of people who answer a question without any knowledge on the subject and just b.s. their way through it.

I worked for a credit card company (MBNA now owned by Bank of America). And no nothing has changed because I only left 3 months ago.

Closing a card with a balance will report to your bureau as closed by customer. The ONLY time a closed account affects you negatively is if the bank closes the card because of high balances/late payments etc. They have every right to raise the APR but chances are they will not, unless your payments are not arriving by the due date. Regardless that you closed the account all activity reports to your bureau and they do still have the right to charge fees. (Many customers yelled at me for overlimit fees when the closed their accounts.) All closing your account does is stop charging privlieges.

You do not lose part of your credit history nor does it change your debt to income ratio. Debt is debt regardless is the account is open or not. Please talk to your credit card issuer to get your answers on this subject as not one of the above answers are correct

Answer 2

When you close an account, you lose a portion of your credit history, and it has an effect on your debt/credit ratio. These are two major factors in calculating your credit score.

The effect isn't that major, and as long as you continue to make other payments it should recover in a few months.

In your case, I would first look into getting another credit card with a much lower credit rate. There are several that are offering a 0% interest and allow balance transfers.

With this info at hand, contact your current credit card company and tell them to either lower your interest rate or you will cancel the card and go to another company. If they don't, then follow through on your threat.

You can freeze your account so no more activity can take place, then work on paying off the debt. Once paid off, have them lower the credit limit so you are not tempted to run up a couple thousand more in debt.

Lesson to learn right now....never by something on credit that you can't afford to pay off at the end of the month.

Answer 3

Use a credit counseling service. You will save your credit rating and thousands of dollars.
Two excellent, established and trusted national services are Consolidatedcredit.org (Consolidated Credit Counseling Services) and consumercredit.org (Consumer Credit Counseling Services).

If you close the account with a balance that you do not pay timely, it will go into collections. Your credit score is in part determined by your open and available credit as well as your payment history. Closing the account can negatively affect your credit score and standing.

Answer 4

You can close the account with a balance, and as far as I know it won't hurt your credit rating unless you stop paying.

They did NOT raise the APR when the account was closed, but you can't negotiate a lower rate if it is closed. I guess it depends on the card.

My hubby closed to cards a couple of years ago so we'd stop using them, and his credit score is excellent.

Answer 5

an account will remain open until paid in full, the company can put a block on you using it but they are losing interest whilst your not spending the best thing to do is every time you make a payment reduce your spending limit by what you have paid so you are never tempted to spend cos no available credit or cut up the card no temptation at all then

Answer 6

A better idea that closing the account is not using it, and paying it off gradually as fast as is possible. When the account remains open, your total available credit line is higher which is better for your credit rating and APR lenders are willing to offer you.

Answer 7

As long as the account is "active" they can make adjustments according to your cardmember agreement regardless of whether it is open for use. The first thing you need to do with learn a little self control. If you spend more than you can pay off each month, you will be in a hole for the rest of your life. As they say in a commercial in my area, "I want my credit to be so bad I can't buy steam off a hot dog."

In the end, if you can't control yourself, cancel the card. Create a realistic budget and make payments as big as you can.

Answer 8

They will increase your APR when you close it. Cut up your card and toss it. Pay the bill as you can. Do not charge on it again.

Answer 9

Ask yourself how badly do you want to be out of debt?..If you have to cut it up...become deterimed to pay it off..no matter what! Every time you want to spend ask yourself..what more important..this thing that I'll regret later..or being Debt FREE...and there is nothing like being Debt-FREE...I am..and I wouldn't trade that for all the bell's and whistles in the world! I pay all my bills the day they come in...not next week,..not tomorrow..TODAY the check goes out the DAY it comes..it's FREEDOM!...Debt is SLAVERY!

Answer 10

transfer the balance to a lower interest rate credit card and make bigger payments.