I have a question about credit?

Question

Well I have 2 credit cars one with a $9300 limit and one with a $500 limit. Then I have 3 store credit cards all with $500 limits. For the store cards I have right around 200 dollars on each of them. For the other 2 credit cars the 9300 one has about 8000 on it ( I am trying to pay it down) and the other has about 200 on it. My question is ... when I am done paying off the store card and the other 2 should I cancel some of them? or just keep them? Which would be better credit score wise?

Answer 1

Once you have paid them ALL down, cancel the cards with the lowest limits. Leave your oldest account and your high limit account open.

Answer 2

You can gain some very cool knowledge about all of your credit/debt on Dave Ramseys site. Yes cancel those cards only after you verify that the balance is 0.

daveramsey.com

Zirkamer

Answer 3

Definitely get rid of the store cards.  They generally charge high interest rates and since you have regular credit cards, you don't need them.  Are you planning on applying for more credit soon?  Is that why you're concerned about your credit score?  If you are not, don't worry about the score and just close the cards.  There will be a little ding to your score but not as bad as if you decide to use the cards again and get over your head with too much debt.

Answer 4

Don't cancel any credit cards till you have all of them paid in full.  Closing accounts will lower your overall available limit. This makes your debt percentage higher.  Carrying balances of more than 30% hurts your score.  Over 50%, kills your score.  

A big score drop could set off universal default in your remaining credit cards.  You don't want those big interest rate jumps.

Also, when you close an account, you close the history.  The account will still show on your file for about 10 years, but it has less impact on your score calculation.

You should make a strict budget.  Take every penny you can squeeze from that budget and throw it at the highest interest rate credit card, while making minimum payments on the rest.  When the highest rate card is paid off, move to the next till they are all paid in full.

Once all balances are paid off, I recommend you keep the two major credit card accounts.  Only keep store accounts if there is a special reason -- and you should never carry balances on store accounts due to the high interest rates.  Close the accounts via mail and request written verification that the account is closed and 0 balance.

The best thing for your score is to only charge what you can afford to pay in full every month.  You will build a good payment history, save all that interest, and stay out of debt.

Answer 5

According to a financial WIZARD!!!  on CNBC-Saturday nights at 9 p.m.

(I won't use her name) you should never cancel your accounts.

Answer 6

Canceling credit cards can affect your credit score negatively.  You should just payoff and cut up or do not use the ones with no balance.

Answer 7

Never cancel a card. The older the account, the better for your score. On the other hand, having too many cards can be bad for your score.

Answer 8

It doesnt really matter if you cancel them or not. The question is if you still need them?

Credit score goes mainly off of a comparison of how much money you have credited, and how much you have paid back. Also, it goes by how many different companies are owed at one time, and any red marks on your credit (like late payments, ect)