Is it better to leave a credit card open on w/ no balance or to close the credit?

magnate · #1 (**permalink**) 12-02-2006, 10:21 AM

I want to be able to purchase a home and get a loan in the future.
I am really trying not to ruin my credit. So i was wondering if leaving a credit card open with no balance is a good idea. I have heard other places where that was a bad idea.

Any help will be greatly appreciated.

vishenda · #2 (**permalink**) 12-02-2006, 10:33 AM

All the lenders I work with say to leave it open with no balance. It shows spending restraint and availability of creditworthiness. Also, never let a card go over 50% of the limit. If you do have some 0ver 50% ask for a higher credit line.
Good luck

kristinecfp · #3 (**permalink**) 12-04-2006, 10:08 AM

If you have a good history with that credit card (no late payments or missed payments), it's best to leave it open. You shouldn't close old accounts or make other changes that might affect your credit score for at least 6 months before you are planning on making a major purchase.

vsjhoc · #4 (**permalink**) 12-04-2006, 10:14 AM

Leave it open, but use it occasionally. Charge small amounts and pay them off. That way you are showing the "restraint" that the OP mentioned, but you are also showing your ability to use credit responsibly.

Fern · #5 (**permalink**) 12-04-2006, 01:47 PM

I agree with vishenda, unless, that is, you have a dozen credit cards. If you have too many credit cards, it's not a good thing, becus mortgage lenders always count the maximum credit limit as debt, even if you pay in full, since the card reflects your ability to rack up that kind of debt. So they have to cover their bases.

For that reason, a long time ago i told my 2 credit card issuers not to automaticallly increase my credit limit, but to freeze it at a certain level, as i don't need/want the higher credit limits and it would count against me (in that regard) if i borrowed money.

Obviously, you need to demonstrate some kind of creditworthiness, so a few cards is ok.

PRICEPLUS · #6 (**permalink**) 12-05-2006, 12:37 AM

I concur with vishenda as well!

instantinfo4you · #7 (**permalink**) 12-05-2006, 12:28 PM

It depend on whether you ever plan on using this card again. Sometimes it isn't a bad idea to leave a card open. If you do then be sure to make small purchase every once in a while, and stay on top of the payments, making sure no one else may be using it. Totally up to YOU though.