I will not have anything open on my credit except my car loan. Some say it's bad to close it after paying it off, but at the same time, having a paid off card with a $3,000 limit is basically a "liability". I'm not worried about accruing more debt... I have no problem putting the cards away and not using them (quite easy considering I'm in Iraq for the next year and have no use for them anyway)... My concern is that when I go to purchase a house in the next year, they will see all the "available" credit I have (that I could potentially rack up)... any ideas/suggestions? Thanks.
2007-03-03 07:34:14 · 4 answers · asked by ? 3 in Business & Finance ➔ Credit
KEEP THE ACCOUNTS OPEN!!!!
If you close the accounts, you will have no credit. Let's say your car loan is $15,000....that will show you as being $15,000 in debt and having no funds available (ie., your credit is maxed and you are not credit worthy.) Then if you decide that you needed a credit card after all, or you go to buy a house, due to you being maxed out, you will most likely be denied. If you decide to reapply for a credit card, the history starts all over again, whereas if you had a card that you just didn't use, it shows you've had credit available to you for years.
The $3,000 limit won't be looked at as a liability. It shows that you have credit available to you, which makes you credit worthy.
2007-03-03 07:45:41 · answer #1 · answered by Dodger's mom 3 · 0⤊ 0⤋
A credit card open is available credit. As long as the available credit is not too large compared to your current income, there is no issue. But, if you have $20K in credit and your income has dropped recently, some might consider your limits a risk to become indebted.
My rule is, keep the card open as long as their are no annual or monthly fees. If you pay any fee for the card (except for some reward cards), open another card without fees first, then close out the card that charges a fee.
Any card that you keep, be sure to charge a small purchase now and then, and pay off the following month, as cards that are not used in 12 months might get closed by the bank.
2007-03-03 15:44:49 · answer #2 · answered by JD_in_FL 6 · 0⤊ 0⤋
My advice is that if you're going to keep the cards use them for small purchases say once a month then immediately pay off the ballance at the next statement. If you have credit line it needs to look like they're being used (more to the point that you're using your credit responsibly).
Personally I'd say cancel them and get rid of them since you can always get more (and on a side note take any money you're earning while in Iraq and BANK IT BANK IT BANK IT!!! preffereably in a higher interest savings account).
2007-03-03 16:00:12 · answer #3 · answered by Crighton 3 · 0⤊ 2⤋
It is best to kee them open even if you not using them they will look at how long youhave had them when you try to get a home loan. Most lenders youhave to have established credit for at least 5 years
2007-03-03 15:38:50 · answer #4 · answered by Anonymous · 1⤊ 1⤋