I have two credit card accounts from the same company. The first I've had since 2000. The second I've had since 2005. They both currently have the same limit but the older one has a higher interest rate than the newer has. I am not carrying a balance on the old card. What course of action is best? Cancelling the older account w the higher interest rate but with the longer history or the newer one with a shorter history but lower interest rate? Thanks for the advice.
2006-10-02 10:03:21 · 6 answers · asked by vergon2 2 in Business & Finance ➔ Personal Finance
I would keep both but just cut up the older card with no balance. The reason is that a large portion of your credit score is calculated on the percentage of available credit that you are using. If you have two cards with $5000 limits and $2500 balance on only one card, you are using 25% of your available credit. If you close one account, suddenly you are using 50% of your available credit which could cause your score to drop. Take a look at the site http://www.myfico.com to learn more.
2006-10-02 13:50:05 · answer #1 · answered by troythom 4 · 0⤊ 0⤋
If you are concerned about credit score, canceling the older one with the higher interest but no balance is a good thing to keep around. Unless you are paying an annual fee, there is no need to cancel it. You could just cut up the card and keep the account open. If you do not care about your credit score, then cancel it. I carry several accounts that I've had for twenty years even though I don't ever charge to them just because it looks good on the credit score. A good credit score counts towards interest rates you can get on future loans and believe it or not, insurance. Just a few things to consider.
2006-10-02 18:45:09 · answer #2 · answered by Wake Cobra 4 · 0⤊ 0⤋
I would cancel the card with the higher interest rate. If there's no balance on the account, don't worry about the history, it will still show up on your credit history 'paid as agreed'.
2006-10-02 17:08:06 · answer #3 · answered by smartypants909 7 · 0⤊ 0⤋
Cancel the 2005 card. With your older account, call them and negotiate a rate change. (which will only work if you have been making payments with zero late payment) as long as you have paid more than your monthly payments and have a great credit history with them, they may negotiate that rate change with you. Good Luck
2006-10-02 19:32:38 · answer #4 · answered by Julie 3 · 0⤊ 0⤋
If you don't carry a balance ever, then the interest rate shouldn't matter to you.
Why do you want or need to cancel one of the cards, if you don't have a balance on either one?
2006-10-02 17:07:07 · answer #5 · answered by I ♥ AUG 6 · 0⤊ 1⤋
You are best to carry the one with the history behind it.Credit is a great thing to have if you plan to finance a house,a car or anything like that.
2006-10-02 17:17:47 · answer #6 · answered by gibbyguys 4 · 1⤊ 0⤋