Should I close the account on the credit card I just paid off?

Question

I finally paid this card off after 2 years. I have read other questions and people say leave it open. This is one of three cards I have just paid off. I plan on keeping one open to use as the APR is lowest. If I keep the one card open and close the other two, how will this affect my credit?
Thank you

Answer 1

Ironically, closing the account will probably lower your credit score.

This is because the credit bureaus tend to look favorably on available-but-unused credit, as it indicates that you are definately not living beyond your means.

The formula they like to use is:

Credit Used (outstanding balance)
-------------------------------------------------
Credit Available

Now, the credit bureaus like to see that ratio below 30%.
If the one card you plan on keeping open is already at 30% or below (A $3000 balance on a $10,000 credit limit), then cutting up the other cards won't dramatically lower your score.

If one of those cards has an annual fee, then cut it up quickly, and close the account.

Answer 2

Yes, leave it open. Credit agencies look at your available credit versus your balance. If you leave that one open, that's X amount of credit added to your total available. For example, say you have 3 cards with limits of $1000 apiece. 2 of the cards have a balance of $200. $400 balance due against a total of $3000 total credit is a much better ratio than $400 against $2000. Does that make sense?

Answer 3

I am not an expert at this. I just checked my score, and it was at 700. I guess that is above average, but I was listed as "Non-Prime" meaning medium-risk. I was a little dismayed. ANYWAY, it said some of the reasons included closing credit cards too quickly. That is hurts...like you pay & run, and they don't like that (cause they won't make money of course). So, I'd say if it is payed off at least keep one, maybe two. Buy something on it every once in a while, then pay it off immediately. But again...I am only 25...so...

Answer 4

You should leave them open. Part of your credit score is determined by calculating the percentage of available credit you've used. If you close cards, your amount of available credit will drop. Also, it's good to leave cards open that you've had a long time because it shows a longer financial history, which is also good.

Contratulations on paying off your credit card debt!

Answer 5

do no longer close the account. save it open and use it approximately each 3 months or which you would be able to save the account lively. last the account closes the historic previous. Even tho the closed account will teach on your credit report for greater or less 10 years, it won't count huge type as a lot on your score.

Answer 6

Leave them all open it gives you a great credit to debt availability ratio, and if you have had them for years that is even better. again leave them all open if you close even one you will regret it when you check your FICO score. Lets see you have for example three cards for 1K each you use one and have 300 hundred on it your debt ratio is 10% you close two you have credit of 1k and have used 300 your ratio is 30%.

Answer 7

Leave it open. However, only make small purchases that you can pay off easily the next month. Helps to increase your credit score.

Answer 8

Just keep the card open, the balance is $0.00, nothing to worry, unless you would use it again. A credit card is nice and convenience for your cash-carried safeness. otherwise, is a sweet poison ivy.

Answer 9

If you leave it open more than likely you are goig to use it. So if you dont mind paying the bill keep it but if you can do with out it i would get rid of it