Does closing my credit card account and then payin on it until its paid off...does it affect my credit score??

Question

Does closing my credit card account and then payin on it until its paid off...does it affect my credit score??

Answer 1

Yes, if you close your account it reduces your available credit.

Say you have two credit cards and you have a limit of 3000 on each, and you owe 2000 on each.  So you owe a total of 4000 on a 6000 limit.

If you close the one card, but you still owe 2000, then you owe 4000, but have a limit of only 3000...doesn't look good at all.  It makes it look like you are maxed out.

Plus, if you have a good history with the bank, you want to keep that.  The age of the accounts you hold also makes a difference.

If you no longer wish to use that account, the best thing to do is to pay it off, but keep it open.

Answer 2

If you cancel a credit card it doesnt lower your credit score but it makes it harder to increase your score because you will have less available credit.  If the card has a ridiculous yearly fee try getting a card with no fees before you cancel.

Answer 3

Any time you close a credit card account it affects your score.

Say you have 5 cards with $5,000.00 limits for a total of $25,000.00 and have a total balance of $7,500.00 your total usage is 30% which is where you want to be or lower.

Now if you cancel 2 of those cards reducing your total limit to $15,000.00 with the same $7,500.00 balance your total usage jumps to 50% and you score takes a hit.

Just pay off the card and then use it a cople of time a year to keep it active and your score will be better.