Paying off credit cards?

Question

Is it better for my credit rating to close my credit card accounts which have been paid off in full or to leave them open?

Answer 1

Close them. Too tempting not to use and it can all be so easy to build a mountain of debt up.

Answer 2

Your credit card debt has both the higher interest rate and balance. If you have an opportunity to make a substantial payment towards one of them, I think it would be prudent to work on your credit card debt first. Remember that the higher the principal balance on a credit card, the more in interest you are paying in terms of actual cash output per month, while the car loan is set up as an amortized schedule and you know what that is going to cost, making it easier to budget. Besides, while your car loan will help you some in the overall credit realm, paying down a large credit card debt will help you A LOT when it comes time for a credit report. Besides, paying off the credit card, or even paying it down significantly, will put you in a good position to negotiate with the credit card companies for a lower interest rate. Hope this helps you make a wise decision. Good luck.

Answer 3

To be honest it depends greatly on how old the Cards are and how much you have as a limit. always keep your oldest card open. And use your oldest card to buy a pop then pay it off. This gives you the best history. Having to many Cards with limits can also be detrimental, even as unused card. Never use more than 30% to 40% of credit limits.

I recommend going to myFico.com buy the simulator and find out from the credit agencies them self what would be best.

Answer 4

If u can afford any credit card standing charges then by leaving it open shows that u have a good credit rating, thats if u pay ur card bill on time. If ur struggling say due bto being made unemployed etc, then the best thing is to cut it up and close account especially if ur debt free, because if u dont then as u struggle there will be temptations for u to use the card which will put u in debt and start all sorts of probs for u. If ur debt free then call the card company, tell them that ur out of work at present and that u wish to either close or suspend ur card account to safeguard you from getting into serious debt risks. The card company will respect u for doing so and they may tell u to destroy ur card/s and return them to them and they may keep ur account in suspend untill ur in a position to use again. I recon u will still have ur good credit status held by card company as u made the best move before getting in a hell of a mess and getting a black mark against ur credit rating. Think about it, why pay for a card if u cannot use it, by telling the card company thaT U HAve temporary prob and wish to play safe, u will get ur cards back when u return to work. Good luck.

I am sorry I didnt read ur question properly, i am disabled. Well if ur in full time employment and the card fees are no probs, well its up to u, I cut mine up when I fell ill and became disabled back in 1990, I payed back what I owed via an agreement with card company to suspend intrest untill the amount fell to an acceptable amount. I never askied for it back as I pay things cash, if I cannot afford I dont buy simple as that. Credit cards are a curse, u can get into hell in all states, I use a debit card which comes out my cheque account, so if there is not enough in aqccount then again I dont buy. Try and live without ur cards, it will be hard for some people at start but when u see ur savings account rising then it will give u a boost, also u save and something nice crops up u fancy, and it costs a few bob and hey I have saved so much by cutting up my cards that i can afford this, I can pay it in cash and its mine right away and hey I still have a bundle of cash sitting in my savings account, all because I took this guys advice and got shot of my credit cards.

You will thank me if you do.

Please let me know in time to come how you are managing things and if my advice helped.

Good luck, Jimmy Scottish disabled gentleman living in Essex England

Answer 5

If you are hoping to get other credit in the near future, then it is best to close your unused accounts.
The ideal number of credit agreements that lenders look for is between 2 and 4. Less than this and there is not enough evidence of your ability to handle credit, much more than this and they begin to think that you are "over-extended", that is, if you went mad and maxed out your credit cards, you would not be able to afford repayments.

See below for a fuller explanation:

Answer 6

it's best to leave them open....i hope my explanation makes sense:

say you have 5 cards all with a $2000 credit limit. If you pay 4 off and only owe $2000 on the last one....you will have a credit to credit limit ration of $2000 to $10,000. If you close the 4 that you paid off your credit to credit limit ratio becomes $2000 to $2000 which means you owe your total credit limit....so it looks worse than if you only owed 1/5 of your limit.

hope this helps!

Answer 7

Leave them open and charge a small amount once in a while to keep it open, then pay the ammount due in full the next month. That boosts your credit score.

Answer 8

If you're up to your eyeballs in credit card and other debt, paying the minimums and little else, it's time to get serious.

The best way to get rid of debt, experts agree, is to attack the balance with the highest annual percentage rate first. When that one is paid off, move onto the debt with the next-highest interest rate.

But always attack that high-interest debt first. On that debt, you want to "double, triple, quadruple minimum payments
read more about it at: http://www.credit-card-forums.com/index.html

Answer 9

It's better to leave them open - you will get a higher credit rating if you do, but of course you will always have to watch out that nobody uses them fraudulently.

Answer 10

Always close the accounts that have been paid off in full so that your credit score goes up.

Answer 11

LEAVE them open! In fact, make small purchases each month or so and pay those of right away, leaving a small balance of even 5 dollars is even better.