CC Question- which looks better

[MelC]

Which looks better on your credit

A credit card with a $300 limit but has always been in good standing and has a zero balance and has been open since 2007

Or canceling that card all together!

It was just cut from $1500 to $300, randomly- "Based on the current economic crisis" was what I was told and nothing to do with me.

I am really peeved, I dont even want it. I never used it, just had it just in case. But a $300 credit card is useless to me. Id rather just close it because I feel like what they did to me is not right. Ive always been a good customer.

I have 3 other cards with better limits and zero balances, also open for several years.

Will closing it hurt my credit? Will keeping it hurt my credit because its only a $300 limit? Or does keeping strengthen my credit?

Thank you in advance!!

[disneysteve]

I have a similar situation. I applied for the Disney Visa a number of years ago. I got it, but they only gave me a $500 limit which is worthless. I never use the card. I don't even carry it. The main reason I keep it is because Disney periodically has special deals for card holders. For example, we were in Disney World recently and we took a behind the scenes tour and got a discount for having the card, even though we didn't charge the fee to that card.

Anyway, closing any card will cause a temporary drop in your score, so I wouldn't do it if you anticipate applying for a new loan in the near future. Shortening the average age of your accounts lowers your score. Reducing your overall available credit reduces your score, but I don't think lowering it by $300 would make much difference.

So keeping it does not hurt your score. Closing it could hurt but only a little and only temporarily.

[MelC]

Thanks Steve!

We were thinking of buying a new home early-mid next year, do you think whatever drops in my credit that occurs will have bounced back by then?

[disneysteve]

If you are going to be getting a mortgage within a year, I'd keep the card. It isn't costing you anything and it isn't worth doing anything that negatively impacts your credit score even temporarily.

[boosami]

Originally Posted by disneysteve

If you are going to be getting a mortgage within a year, I'd keep the card. It isn't costing you anything and it isn't worth doing anything that negatively impacts your credit score even temporarily.

Keep it but don't spend on it. With that small of a credit line, any charges will skyrocket the credit utilization ratio on that card, which will hurt your credit.

[MelC]

Ok! Thanks so much!

[project15]

While I agree that you should keep it open since you'll be buying in the near future, a card open since only 2007 (2 years) still does not qualify as a long term for credit. When we bought our house in 2008, my credit score pulled up my first card that I got sometime in 2003. It was less than 5 years and did not make me qualify as having "long term" credit - which docked my score a little.