Is it better to close a credit card account or have it open and not use it?

Answer 1

To have it open and not use it looks better. To close it is not as bad as you think. It says closed by consumer...meaning you didnt want it.

But if it stays open too long and you dont use it...some creditors automatically freeze your account.

Good Luck

Answer 2

Advice used to be given to close old and unused credit card accounts in order to reduce your "potential" available credit (which could change your debt ratio after you've been approved for a loan). Now, however, the ratio of your debt to your credit limit is more critical, so closing old accounts only raises that ratio - which you don't want to do. Some people have moved debt from several credit cards to one card and then closed the old accounts. Since creditors look at the debt-to-credit limit ratio this can have a bad affect on your credit score because you have the same amount of debt but less available credit. So don't close old credit card accounts just because you're not using them.

Answer 3

Things that impove your credit rating: They look at how much you COULD charge (your limit) vs. how much you actually have charged (your balance). They love it when it's high vs. low.

Another is, your record of on-time payments vs. late (every month that goes by with an open account and no lates is a bonus), and how long you've had the card.

Keep it open and watch for fees (hide the card in a secure place). You'll build up your credit numbers a little bit at atime, plus you have some security for the rainy days that always show up eventually.

Just for fun visit http://www.freecreditreport.com/ from Experian and see what they say regarding your status. It'll provide you with a lot of info about yourself (no "score" until you pay) as well as a possible better answer to your question.

Answer 4

I have a 3rd option, keep it open, and use it LIGHTLY. Reason being so that the account can still show activity. Closing an account hurts your score because when you close it, so goes the payment history and available credit that went with it, and keeping it open and not using it doesn't help either becuase the account's inactive from not being used. Charging no more that $30-50 a month and paying the minimum payment should do just fine.

Answer 5

It just depends...If you have an open credit card just sitting there, it does nothing to improve your score (you would have to use it for it do have an impact). If you close it, it could hurt your score because it will effect your debt ratio.
IMHO, consider how old the card is. If you've had it for a long time, consider keeping it. Your length of history is a part of your FICO score. If it's a newer card, you'd be okay to close it and not have it hurt you too much.

Answer 6

Its better to close an account!

I know, I had a lot of "credit cards" and never used them...(people just sent me cards, and I kept them in my wallet, not even intending to use them at all, because they were for stores I never frequented).

Well, I went to apply for a loan, and since I had all that "available" credit..."open" to me, they said I wasnt approved! (It was a car loan).

So, I had to close all those credit cards I didnt use, so that I could get the credit score down, and afterwards I was able to get my car loan.

So, having too much credit is as bad as not having enough credit!

I wish you well...

Jesse

Answer 7

Close it. You need to show that you don't have too many credit card obligations available on your credit report if you go for a loan for something. You need to have aestablished a history of repayment, but don't have too many (more than a couple ) open at any one time. Lenders get nervous when they see a bunch of unused credit cards .....

Answer 8

depends, it looks better on your credit....but some credit card companies charge anual fees which may not be worth keeping a card open for.

Answer 9

On my card I only charge what I can pay off at the time it comes in,No interest and I have card if I need it, Find one with no service charge..

Answer 10

Banks are only willing to give you money when you don't need it. I'd keep it open because some day if you need money, it will be available. Just don't ever use it. Keep it for a rainy day.