So, if I cancel the card it's not bad for my credit, right? Just pay the balance, call them and cancel it?

Question

Thanks everyone , very helpful!

Answer 1

That is croorect. The card you cancel will just show up on your credit report as having a zero balanced, and as being closed by cardholder. Nothing at all wrong with that.
Did you know you can get a free credit report once a year at
www.annualcreditreport.com

Answer 2

The answer is it COULD harm your Credit Score or it COULD have no effect, but how much if at all depends on a lot of factors.

One major factor in your credit score is credit utilization. That is the amount of available credit Vs. the amount of used credit. Generally for the best scores you need to keep this at under 30%. So if you have on all of your cards a total limit of $5,000 you should not have a balance of more than $1,500.

So now if you close one card out depending on it's limit it might boost your utilization and lower your score. For example if you did have a total limit of $5,000 and had a total balance of $1,000 your utilization is 20% which is okay. However, you now close a card that had a $2,500 limit. Your new total available now drops to $2,500 and your utilization has now shot up to 40% which will lower your score.

The second thing that may lower your score is if this is one of your oldest cards, closing this will lower your credit age. The longer you have a card open the better it looks.

If this card does not charge you an annual fee, then it does not cost you anything to just have it open and not use it.

Answer 3

I don't see how anyone can say yes it well hurt or no it won't without knowing more info.

Since you didn't say how old the card is, if it's one of your oldest or it's a new one, if any of your other accounts have mid to high utilization or low to no utilization, if you have a full rounded file or just a few small accounts, or it's your only card, if you have other accounts and they are positive or negatives, etc., etc., etc.

If it is a fairly new account and you have other accounts that have good utilization (low or no balances) and fairly long history, you might either see a tiny ding or it might not hurt at all.

If you have moderate to high balances on your other credit you might see a bit larger ding.

If you have only a few accounts, you will probably see a pretty good ding. Especially if you have high utilization on those accounts and if they have a short history.

If you are not planning on making a large purchase in the next 6 to 12 months (home or auto), not planning on applying for any other type of credit and you are paying an annual fee on the card, a score drop probably won't matter.

If you are planning on applying for credit soon, you might wait until after to close it.

Answer 4

Unless it's a card with a riduculous fee attached, like a yearly $29-$129 fee, DON'T cancel it. Pay it off, and then cut it up and don't use it. Your credit report will keep reporting it at a zero balance every month, which is good for your credit.

Answer 5

Having long-standing accounts is actually good for your credit, so especially if you've had the card for a long time, keep it! Pay it off, of course, and even cut up the card if you want so you can't use it (I worked for an attorney once who kept his cards frozen in a block of ice in the freezer so he couldn't use them without first thinking long and hard about the thing he intended to purchase), but it can be very beneficial for your credit to keep the account open.

Financial advisors used to tell people with bad spending habits to cancel their credit cards, but the current wisdom is to keep the account open for the sake of your score.

Answer 6

You can also get a free credit report 4 times a year by keeping a rolling fraud alert on your credit report. It lasts for 3 months each time and each time you file one they have to send you a copy of your credit report.

Answer 7

What does it matter what it does to your score? Are the fico police waiting for your score to dip to take you to fico jail. What is important is that you have one less hassle in your life. You have one less source of risk in your life. You have one less line of credit to go into collections if you get into trouble and can't pay your bills. Watch TV and see how many commercials you see for debt relief. The only way to get out of debt and stay out of debt is to cut up those cards and pay cash for your stuff. You can get a home loan without credit cards. In fact if you don't have any cards then you will have more free income to pay that mortgage. Plenty of people like to play the score game like their playing Dungeons and Dragons. Get rid of the credit score and fico hassle just cut them up. Normal is credit. Normal is broke. Be weird.

Answer 8

Exactly right - bad credit will only show with missed payments or overdue payments.

Answer 9

Correct!