So if I shouldnt close my credit card, then what?

Question

Hi. I've read questions/answers here about cancelling credit cards after paying them off and how it can be bad.

Well if I keep them will I be charged for anythign even if there is no balance? Do I chop up the ones I do not use and just leave the account open?

What if I have a Best Buy card? That is the same as a credit card right?

Ok thanks for some of your answers. I tried cancellign my older card but it is a good thing I didn't. They lowered my interest rate 4% which is why I kept it.

But I'll be sure to pay off my Best Buy card ASAP.

Answer 1

A Best Buy card is classified differently than a credit card. It is know as a depatment store card. FICO likes to see a variety of credit so having 1 department store card will help your credit score as long as your balance is not above 30% of your credit limit.

Thats the answer! short and sweet.. good luck!

Answer 2

Closing our your account after paying off the balance is bad because the longer your have a card or account, the better your FICO will be.

Any accounts that you have will not have a fee on them if you don't use them except for credit cards that charge a yearly fee - like some American Express cards. Then the yearly fee will be asscessed, nothing else.

The Best Buy Card is a credit card, but once you pay it off, there are no other fees associated with it.

I just put the cards in a safe so I don't have them around. I have some cards that have been open and available for 5 years and have not used them since. They also don't send statements for them when there is not a balance, but they still show as active on our credit.

So keep them, and just put them up or cut them for the ones your don't use and keep the account open. It will make your FICO higher the longer you have accounts with available credit.

Answer 3

There are several schools of thought over whether to close credit card accounts or not. The ratio between available credit line and actual debt has a large impact on your credit score. Thus many people recommend never closing a credit card account.

My advice would be to keep the oldest major credit card (Visa, MasterCard, Discover) without an annual fee. This will keep your credit history on your credit report. Close the rest of the credit cards, especially the store charge cards. Yes, your credit score will take a hit but it will rebound in a short period.

A stack of credit cards in the back of your sock drawer is just asking for problems. Why create an opportunity for identity theft?

Make sure your account is paid in full and there are no automatic payments set up. Send a letter requesting the account be closed (no phone calls or email) and request confirmation that the account is closed. Keep these with your important papers.

Answer 4

Call them and ask if there is any annual fee. Most likely, there is not. If you have a 0 dollar balances, just put your unused cards in an envelope and shove them in your sock drawer. You will be charged nothing. To be safe, it would be a good idea to check your credit report every year to make sure all the cards are still at 0 bucks. And if you move, make sure you keep all the credit issuers up to date on your address. I wouldn't chop them up, since they have all the customer service numbers and your account numbers. You could write all this stuff down and then cut them up, but I would just lock them in a firebox instead.

Charge cards (only good at the store they come from) are sort of like credit). However, their credit lines are not allows figured into your credit score. I don't thing it would matter one way or another if you close them or leave them open. If you leave open, just make sure the card is kept in a secure location

Answer 5

Closing credit cards is never bad. However you must do it the right way.

First, you must request a 'Hard Close' and it must submit this request in writing to the credit card company.

Second you must pay the card in full. Make certain that you check your credit bureau report that it reads 'Account Closed By Consumer'. This is very important.

If you keep the cards and have a zero balance, you will be charged a yearly fee just for the 'privilage' of having your name embossed on their plastic.

If you chop the card, 'Hard Close' the account.

A Best Buy card or any department store card is never a good card to have. They charge higher interest rates and yearly fees than Mastercard or Visa.

Rather than paying interest, why not earn interest with a savings account that pays you to save. Earning compound is much better than paying interest.

Use credit cards responsibly. Don't let them control you.

Your credit is a reflection of your character. Keep your good name in good standing.

God Bless.

Answer 6

...and to add a little tip to all the good advice posted :
To keep the card active -and take advantage of the credit line- you would have to use it once in a blue moon... Even it is something insignificant like a DVD -something you would pay off once you would get your statement.

good luck!!!