Should we close out our credit cards? Why or why not?

Question

My husband and I have three credit cards. We only use one of them and we use it sparingly. My question is, is it okay for us to close the accounts for the two we don't use? Could closing the accounts hurt our credit? Thanks for your advice! (By the way, none of these cards have annual fees.)

Answer 1

It is best to keep accounts open even when not in use. When they are closed they no longer show up on TRW or similar credit reporting records. As long as they are open and up to date on payments your credit rating goes up a little at a time. I have specialty cards (tires, furniture, office supplies) that I rarely use but I keep them open and it has enhanced my credit score. And whenever buying something, save up the cash, put it on your card, and mail off the full amount a week later. This REALLY helps your credit rating climb.

Answer 2

Follow Atash's advice, it's excellent.

Just want to add a couple things. While Atash takes the time to actually look at someone's credit report, the vast majority do not. They simply look at your credit score and judge you from that. Therefore, anything you can do to keep the score up will help. All of those comments you are allowed to place on your report are worthless.

While ID Theft is a problem, getting it fixed on your credit reports is not. New laws passed in the past few years make it easy, but you MUST know the law and follow an exact procedure.

A few years ago I was a victim of ID Theft. A couple of collection reports appeared on my credit report. Not knowing enough back then, I figured a couple polite phone calls would fix the problem. Last year, when I got my credit report, I noticed they were still there!

This time I didn't fool around. I followed the proper procedures, sent out the letters and made my phone calls. After 6 months, they were still there!!!!!

So I filed a small claims lawsuit for violation of the Fair Credit Reporting Act. I settled with the reporting agency for $200 and the collection agency paid $1000, plus court costs. It's very easy to do this, and you don't need a lawyer.

Just remember, the reason collection agents get away with a lot of thing is because you don't know the law! Take the time to read the links below and qluit playing around with these people!

Answer 3

My lesson about the use of my credit cards is:
1) Employment. Make sure when switching jobs, keep your income the same if not bigger. For smaller income, burn the cards.
2) Careful calculations. Add 10% then divide by 12 will problaby pay it off about a year.
3) Prey! You are being tested.

I don't know about hurting your credit when closing your account. But I heard long time ago that if you don't use your card can hurt your credit.

For "no annaul fees", they'll find another way to charge you.

Answer 4

No credit history is one issue but I don't think that is a problem for you. You probably already have more than you realize.

Having been on the receiving end of credit reports, when checking on prospective tenants' credits, LONG credit reports do not give me a lot of confidence.

There are also numbers related to how much potential debt you're allowed to get yourself into. Big numbers do not inspire confidence, at least not in me.

If you do get rid of the credit cards, DO NOT change your minds and re-apply for new ones. That would hurt your credit report. Suddenly applying for new lines of credit is considered a bad sign.

Here is something to think about, which is related more to personal financial security, but can impact your credit:

If one of your credit cards was ever stolen, technically, you are only liable for $50 in fraudulent charges PER CARD. Note that YOU are liable, not the store clerk who failed to check for ID, or confirm your signature. However, it is much worse than that in practice. You can report credit card fraud, but the thieves can hit retail operations that do not immediately verify credit cards, and continue racking up bills. While you are not _legally_ liable for such actions, if the credit card company fails to acknowledge this fact, you may have a customer service nightmare to handle.

Worse, all the merchants may report you to the credit reporting agencies, long after you reported your cards missing. In fact, the way that credit reporting works, you can get stuck in "feedback" loops whereby the agencies and merchants simply keep re-reporting you!

It is therefor a good idea to keep relatively few cards, so that you can stay on top of them and take action right away if one of them goes missing. I believe it is possible to call your card issuer to negotiate "verification required". Some issuers will be happy to put your picture on your card (but 80% of retail clerks don't seem to be particularly alert). It is also possible--but I know from experience that they tend to ignore your wishes--to set your credit limit lower (the problem is, they will soon set it right back high again with a congratulations letter telling you that you've earned a higher limit--we have gone around and around about this at our house).

Answer 5

No you shouldn't. Its better to keep the ratio of outstanding balance to total available credit as low as possible. Credit scores look at how much of your available credit you've used. If you get rid of 2 credit cards, then your available credit goes down. So you might go from an example of 2000 charged out of 10000. Get rid of 2 cards and it goes down to 2000 charged out of 3000. Depending on your cc limits of course.

Answer 6

I say get more credit cards, you never know when hard times may hit you and credit card can buy you time to recover. As long as you have will power build, build, build that credit portfolio. You also never know when a huge opportunity may arrise and you need a large sum of money without having to go through a bunch of hoops to borrow it.

Answer 7

I found some good info here.