I want to cancel a Visa that I never use (from Bank of America, tfui, tfui). I searched long and hard on their Web site to find a link, and finally came across the following:
Your real-world experience valued.
HB
it is somewhat true. you have to have some credit in good standing for a really high credit score. they also look at things like debt to credit ratio.
I've heard tell that occasionally using a credit card but always keeping it paid off every month is the best strategy for keeping ones score high.
nate
Yes,it can lower your score. For example, if you have 3 cards with a $10,000 limit on each, and a $10,000 credit card debt, you have used up 33% of your available credit. If you now cancel one of the cards, you have used up 50% of your available credit and this makes you more of a risk, in the eyes of the credit folks, even though you haven't increased your actual debt.
Do you ever watch Suze Ormon on Saturday nights, she is big on this sort of stuff?
That's exactly what I do. I NEVER carry a balance on any of the three cards* I have ( four, with the new Visa). They hate people like us, nyah, nyah, nyah.
*of which I was proposing to cancel one. So is the consensus that I just should let it sit there, unused, rather than cancel it?HB
Just effing INSANE! Even for people like moi who never carry a balance??? It sounds so soulless and mechanical!
She's the one with a lot of teeth? OK, I'll give her a try.
Tx for the "real world" input!
HB
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If you don't carry a balance, and don't use up much of your available credit, then dropping one should not make any significant difference.
Ignore it long enough, and their computer will cancel it for you. You'll get slammed to a different card, or they'll just never send a new one when that one expires.
That link says you lose the history of good credit on that card. If you're never use it it's worthless for credit history. But it does add onto your "available" credit, and that's not good. When I got the mortgage on this house I canceled unused credit cards first, and I always cancel cards I don't use. Available credit in your hand is potential debt to lenders. I say dump it.
--Vic
I believe so, yes. Those who talk aobut credit on the radio, who work for no credit company, have said so.
Even if you still have other credit cards and use them, it's bad to cancel a credit card.
And my friend who follows what theyse people say, says that's what they say.
I forget the details of this including when it's okay to cancel one.
For details, this might be a topic better read about on the web than here.
Why not just let it sit there? Maybe when the banks you're dealing with now go belly up some day, you'll need it.
Of course. They don't make the rules for people who pay their bills right away. Too few of them.
Is it a card you've had for a long time? Longer than your other cards? Aside from what cancelling it might do to your credit ratio, your length of credit history accounts for a percentage of your score, too. Why not just use it once in a while and pay it off when the bill comes in?
nancy
Just keep moving money through the account. To the credit reporting agencies it will look like a balance and you collect the 1%, or better.
That's actually not true. Only a little over half have carried a CC balance in the past year.
I once carried a large introducory interest rate balance on a card. (about 1.9%, much lower % than the car I bought with the money) My balance was about $4500 and my credit limit was $10,000. I asked them to lower my limit to $5000. Big mistake. Now the credit companies looked at it as if I had the card almost maxed out! That's a bad thing.
I read ahead and saw you don't carry a balance, so you will be OK canceling it. But if you carry a balance on one card, it is good to have more credit available on that and/or other cards. They do like to see a lot of available credit that you aren't using, but if you have three cards paid in full each month, you are looking good to them.
Well, I cancelled most of my cards two years ago and some of them threatened my credit, but I didn't notice.
- = - Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist
I cancelled a bunch of credit cards a couple of years ago and my credit score's quite high.
One thing, though, is that it seems to have gone up when the one loan I did have went away. It was a 0% loan for the purchase of some equipment, but it was somewhat incorrectly reported as a fully-tapped credit line (which hurts your credit). When I paid it off my score went up. Of course the cash I used to pay it off was no longer available to me, so my actual financial situation didn't change.
In theory one's credit score is a somewhat accurate reflection of your debt-paying ability but that's on average- it's still got a lot of problems:
A friend of mine got a high credit limit because he was self-employed and they asked his household income. He took their question literally- he was living in a house with about a dozen other people, so he gave them a high number.
To answer your question- if you have enough other credit you're not using, cancel away. Although if you're about to get a mortgage you might not want to change anything right now.
The HELOC is another encumberance on the same property. So, you were probably hit more because the HELOC (even though unused, but could be) effectively lowered your equity in the house. If you were buying a car instead of refinancing a house, it probably wouldn't have impacted as much.
I want to cancel a Visa that I never use (from Bank of America, tfui, tfui). I searched long and hard on their Web site to find a link, and finally came across the following:
Your real-world experience valued.
HB
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A trend is appearing that unused credit accounts will be subject to yearly account fees. Like $25 or $35 a year fees. That's what they are starting to do in Canada and our banking system is a lot stronger than the American for the time being. I'm surprised it hasn't happened yet in the US.
For security and peace of mind if it were me. It's another account that's open to fraud or misuse to theft etc etc.
I'd cancel the card and stop worrying about credit score. Your credit score fluctuates every day anyways. As long as you are over 750 you'll always be entitled to the best rates.
Keep it. They're only going to charge you $5-15 per month handling fee.
On the other hand, a poor rating from BoA will be ignored by everyone else.
I once carried a large introducory interest rate balance on a card. (about 1.9%, much lower % than the car I bought with the money) My balance was about $4500 and my credit limit was $10,000. I asked them to lower my limit to $5000. Big mistake. Now the credit companies looked at it as if I had the card almost maxed out! That's a bad thing.
I read ahead and saw you don't carry a balance, so you will be OK canceling it. But if you carry a balance on one card, it is good to have more credit available on that and/or other cards. They do like to see a lot of available credit that you aren't using, but if you have three cards paid in full each month, you are looking good to them.
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If you are paying revolving interest type loans in full each month you are NOT looking good to them. They are not making interest on lending money to you. You will have a lower credit score.
Why would a credit card company consider you a good customer if all they do is lend free money to you. You have to think like a lender in this situation. People wo pay their credit card bills early are just as deadbeat as people who never pay them because the lender made NO profits by advancing you a loan for a period of a month or two.
You are thinking like a smart borrower. Pay off before interest kicks in. But lenders don't want customers like that so smart borrowers do not look good.
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