Should i keep credit cards i don't use?

Question

I have some credit cards that i don't use. I talked with the credit card companies and of course they said don't cancel them but they also said that they report good credit whether you use them or not. Is there a negative to this? Or is it ok? Why or Why Not?

Answer 1

Keep them, don't use them. Unused credit heps your credit score, plus you are building a credit history. Cancelling them will shorten your credit history and decrease the amount of unused credit you have.

Answer 2

How many do you have?

You should have a max of 3-5 credit cards.

If you have more than that, consider cancelling the ones that are the youngest and with the least amount of history.

HOWEVER...

Keep in mind that every time you cancel a credit card, you are going to get a negative on your credit score for closing down the line of credit. This is because your credit score is based partly on how much credit is already made available to you, and how much you use of it.

Example: a $1000 credit card, and you max it out at 100%. This is bad because you've used up all your available credit, and have taken on $1000 in debt.

but a person who has a $1000 credit card, and uses only 30% of that, or $300, is in the safe zone (anything under 30% is good) because you've only used up 30% of what is available to you, instead of going nuts and using it all up.

So if you had 5 credit cards at $1000 each, you have $5000 in available credit. Let's say you use 50% of that, and have $2500 outstanding in debt.

If you decide to close down 2 credit cards, that leaves you with only $3000 in available credit, and if you're using $2500 of that, you're using almost 100% of all of your credit instead of only 50%.

See the difference?

So the cards that you have open now (assuming you have 5 or less), are reporting GOOD credit because assuming you have a $0 balance, it means that it keeps reporting that you've paid your balances on time ($0 balance = $0 minimum payments), and it continues a history of you being a "good" customer, even though you haven't touched the cards in years.

However, if you have more than 5 credit cards, and some of them are department store credit cards (the worst kind), and some are less than 2 years old, I'd consider cancelling them, and taking the small hit to your credit score. It makes you look more responsible, by having 5 cards or less, instead of having 20 or 25.

However, if your cards are over 5 - 10 years old, I'd consider keeping them, only if you have 5 or less cards, because that means that you are not a "new" customer, and you have a good, solid, strong history of using credit without abusing it - which is what all lenders look for.

Go to this site and read up more on your credit score in general:

http://www.myfico.com/CreditEducation/
http://www.myfico.com/CreditEducation/CreditScores.aspx

Answer 3

HOW MANY CREDIT CARDS SHOULD I HAVE?
A good credit score is based on information such as accounts in good standing, length of establish account history in good standing, payments in good standing, (get the point of “good standing”).

Credit scoring is not on the quantity of credit card account you have but the quality of how you manage your credit card accounts and your debt. I would recommend keeping two cards, three at the most.

Here is how to choose what cards are worth keeping:
1. Keep the Visas and MasterCards. Payoff and cancel the proprietary cards such as gas and department store cards. In truth, those cards are valued lower in credit scoring because of the limited purchasing power (only within that store).
2. Assess the quality that the card offers before considering the quantity of the credit limit. What card offers the better APR (make sure to consider the normal and cash advance rates)? What type of fees applies (annual, transfers, ect.)? How much history in good standing do you have?
3. If the lower credit limit cards work better for you, ask for a credit limit increase. Let the customer service agent that you are considering or you will cancel the other cards if they can meet or beat the credit limit.

Answer 4

Ok...here's what you need to do...
keep your 2 OLDEST credit cards and pay off and get rid of the rest. The longer you have a credit card and are maintaining it well, the better you look.

Now keeping a 0 balance on them each month is key to raising your credit score and available limit. It looks good to have a high limit, because it shows you are responsible. Just dont ever use that high balance as a crutch and get yourself into debt.

Finally, you need to use your card. Make a few payments on your card that you would normally just use your debit card for and then just pay it off same day. Your basically just filtering your money through your credit card in order to increase your credit.

Not using your card WILL NOT make any impact and is pointless, but to keep it and use it wisely will help you look reallllllyyy good and save you alot of money when your credit score rockets up!

Answer 5

Gotta have a balance of both strategies.

- Having more credit vs. balance helps one ratio.
- Having more credit vs. income hurts another.
- Total number of creditors can be a negative as well.
- Empty credit cards with no balance ever don't help your credit as much as ones that are active.
- Always keep the oldest card that you have. Credit age is an important factor in the credit score.

So it's good to keep a card or two. Helps your score and is good for emergencies. But don't keep a bunch of them. Keep the oldest, and the lowest interest rate. If you have another favorite, maybe one more. If any of those have a ridiculous limit (like 25% of your income), ask them to lower it. Dump the rest. For sure, dump store cards if you don't use them.

Answer 6

It is better to keep them open unless they charge you an annual fee.
Keeping credit lines open actually raises your credit score, even if you don't use the card. It helps set a threshold of outstanding debt to available debt and is about 35% of your credit score. The lower the ratio, the better your score can be.
I suggest keeping them open just like your company's suggest.

Answer 7

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Answer 8

Keep them open, available credit makes you look responsible to other lenders. You will need to becareful about annual fees. Also you may want to hide them to prevent temptation.

Answer 9

Keep them open... The longer you have credit cards open the bestter for your score.. No negative as far as I know and as long as you dont have annual fees.

Answer 10

You should keep at least one or two for emergencies, I think.