someone once told me that I should keep them especially if I have been a long time cutomer, and just not use them. My credit report will get worse if I close the accounts. is this true?
2007-07-11 09:03:46 · 7 answers · asked by sweetietw 2 in Business & Finance ➔ Personal Finance
I have heard that it is better to keep revolving accounts open even if you aren't using them than it is to close them. As long as there isn't a huge annual fee and assuming you don't have a dozen credit cards with $200-$300 limits why not keep your lines of credit open in case of emergency.
2007-07-11 09:11:40 · answer #1 · answered by Neka 4 · 0⤊ 0⤋
It's always good to keep one (with no annual fee!) in case you need it. Pick a dollar amount you think you might need if you have to rent a car for a few days or stay at a hotel or something, and just keep that amount of credit.
Having too much open credit isn't necessarily good because if you apply for a loan, even if you have no balance this second, you can instantly max them out if you so wanted, so too much unused credit makes them nervous too.
It won't make your report worse to close them, although that was the popular thinking once. I wouldn't close them all, because if you need one (say you get unemployed) then you might not be able to get one in a time of emergency.
Keep just what you can afford to have in case of emergency (maybe a couple of thousand dollars) and dump the rest.
2007-07-11 16:13:56 · answer #2 · answered by T J 6 · 0⤊ 0⤋
It depends. If you do not use them at all, the credit card company might close them for you "as a courtesy. " Having available credit increases your credit to debt ratio. Also, closed credit cards don't look great on a credit report either. In the end, it is up to you. You should make sure you have at least one account open. It might be a good idea to make small purchases and pay it off right away (it looks good on a mortgage application).
2007-07-11 16:14:28 · answer #3 · answered by lady9780 2 · 0⤊ 0⤋
It depends on how many credit cards you have. If you have many, stores, gasoline etc. you should probably cancel some of them. Keep a Visa or Master Card and that would be ok. Too many credit cards can be viewed by credit reporting agencies and too big a credit exposure. Keep what you need and dump the rest.
2007-07-11 16:13:21 · answer #4 · answered by jack of all trades 7 · 0⤊ 0⤋
From what I understand is that you should use it once and then cancel it. You also don't want cards with large lines of credit. They say that your credit score will go down the higher the limits. They assume that you will go out one day and max them out. When in doubt...pay cash. Always have $1000 in a emercany fund. Murphys Law doesn't show up as often when you have an emergancy fund.
2007-07-11 16:15:34 · answer #5 · answered by Chris K 2 · 0⤊ 0⤋
Not necessairly, it is not that your credit will get worse but it will not be as good. If you have 3 credit cards with a credit limit of $6000.00 each then you HAVE credit. If you have 0 credit cards, you have no credit. Understand?
2007-07-11 16:10:41 · answer #6 · answered by jhebert1974 1 · 0⤊ 1⤋
Pay the 'rental' fee and keep 'em.. You may want - or need - to travel some day. They are almost a 'must' for that.
2007-07-11 16:16:24 · answer #7 · answered by Beejee 6 · 0⤊ 0⤋