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Thank you for sharing useful information. Can cutting up three of my 8 credit cards help my credit score? Can anyone share their opinion in it.
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By cutting up cards do you mean canceling, or still having the CC active but they are simply just cut up?Originally posted by accesscredit View Post
I'm no expert, but I've heard time and time again that you shouldn't cancel CC, because that effects your FICO score. I myself learned the hard way, and open a GAP card, and canceled it within a week, my score took a nose dive. -
If you cannot use the cards responsibly then it is probably best to cut them up regardless of whether your score will take a hit.
If the cards do not charge annual fees then it is generally best to keep them because part of your score is based on the percentage of available credit used. So if you total up the credit limits on all your cards, the balance you are carrying should only be 30-50% of the total credit limit. Generally cancelling a credit card will lower your total credit limit, thus raising your percentage and hurting your score.Comment
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I agree with the above posters but also wanted to add that the length of time you have had a credit card (in good standing) positively affects your credit score. So you may one to keep at least one (the one you have had the longest preferrably if no annual fee) open but do NOT use it. Cut it up like you saidComment
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That's not a bad idea, but be sure to cancel the newest accounts. Old credit cards (or any accounts) help your score. You could also cut them up and just not use them. You won't have credit history on those cards, but you will maintain the account history.
If you have any fairly new accounts, your best bet is probably to close them.Comment
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You have to decide for yourself the risk factor in keeping these accounts active. Will you use them unwisely? Will you know if someone missuses them, family or thief, in a timely manor?
I currently have three active accounts. One is a long term account I don't use with a 0 balance, a recent one I don't use with a 0 balance and a recent one I use regularly and pay in full, for rewards.
I am likely to close the new one I don't use in the near future. I don't know if it is a good idea, but I am doing so for my own assurance.Comment
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Agree with Ryan's post
If you do cut up any cards, then you are better off cutting up the newer ones. Factors such as length of credit history are factored in the credit score. The risk with cutting up and closing any accounts is that it will lower your total available credit, thus potentially increasing the percentage of available credit that you are using.... this may be a small factor if the urge to use these cards outweighs any of the benefits keeping them open may give you.Comment
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clarification...
To clarify, what I meant with the following sentence:
The risk with cutting up and closing any accounts is that it will lower your total available credit, thus potentially increasing the percentage of available credit that you are using.
was that reducing your available credit will likely increase the percentage of available credit that you are using.... there are many schools of thoughts here, but I think a good goals is below 30%.... i.e. if you have $10,000 of available revolving credit card credit available, then an optimal (for credit scores) would be to only be using (and owing) about $3000.Comment
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There are lots of sites online about helping with debt. Google the key words and you should get a lot of good sites to help you with advice on your finances.Comment
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We just got a letter yesterday saying they were going to close an account since we haven't used it in 24 months, It was with Chase.
I wonder how that will affect our score?Comment
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Those letters are very common right now. Interesting how many users on this board (including myself) had Chase accounts they hadn't used for 24 months.Originally posted by kilapapipa View PostComment
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Cutting credit cards shouldn't affect your score. It has nothing to do with how you use your credit card.Comment
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I received a letter from Citi saying that they were going to raise my interest rate unless I called to opt out. However, if I opt out, they are going to close my account. Does anyone know how this will affect my credit? Why would I not opt out?Comment
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Someone else posted recently after receiving what sounds like the exact same letter. By opting out, Citi will close your account at some point in the future (other poster was given a specific date when this would happen). When that happens, your credit utilization ratio (how much debt you have on your head vs. how much available credit you have) will go up. Higher ratio's generally have a negative impact on your credit. You will also lose the benefit of any history you have with that Citi card.Originally posted by spicy14lingo View Post
Why would you NOT opt out? multiple reasons... 2 biggest ones in my mind are: a) if you like the card and want to keep it. As long as you don't carry a balance on it, this wouldn't be a problem. b) you don't want to get the hit to your credit when they close the account.
There are pro's/con's to each side of this, whether you opt out, or let them up your rate. You just need to decide what course of action is best for you.Comment
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How ironic... I make the above post, and I get home to find a similar letter from my bank. In my case, they're simply putting a minimum APR (9.9%) on all credit card accounts, and whichever is higher (your current rate or the minimum) is the one you get. So some people won't even see a rate increase. I will, since my rate is currently 7.9%, but I'm not worried about the increase... It's not outrageous, and even if it was, I've never carried a balance (nor do I ever intend to). I could decline, and they'd close my card, but I won't... it's my longest-standing card, and I like it. So I guess I can now add in my personal 2-cents... haha
(oh the irony... hahaha I really do find it quite entertaining.
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