I have two credit cards that I would love to close the accounts. One I paid off yesterday, the other will be paid off as soon as DH's reimbursement check comes in. Right now between ALL of my cards I have a total limit of $51,300 (OMG!) and am carrying a balance of $11,754 which gives us an overall ratio of 22.9%. If I close these two accounts, it will reduce our credit limit to $39,500 leaving us with a ratio of 29.8%. The other thing that puts a wrinkle in this equation is that one of the cards (Wells Fargo, $7800 limit) is our second oldest card overall. The other card (American TV, $4000 limit) is only a couple months old so I will probably close that one for sure.
I am waffling because I don't know how this will affect our credit score (I assume it will be negative). On one hand we aren't planning on applying for anymore credit anytime soon, but on the other hand I don't believe in completely disregarding our credit score as irrelevant. I have been hearing more and more about how your credit score can affect everything from insurance rates to interest rates, so I want to keep it as healthy as possible.
Yes, I am probably over thinking this. I REALLY want to close the Wells Fargo account so I can be rid of this albatross once and for all. Worst customer service I have ever had and just plain miserable tactics for getting every penny out of us that they can.
Any thoughts?
To close or not to close
April 4th, 2007 at 04:28 pm
April 4th, 2007 at 04:36 pm 1175701003
Also, it turns out my battle with Wells Fargo is going to continue for another month. DH just spent the last week in Detroit and he only had the WF card in his wallet. Which meant that food, hotel and rental car for 4 days ended up on that card. Great. Even if he puts his expense report in today, he won't get reimbursed until the next pay period (4/12) and the payment is due on the 16th. Since it takes them 5 days to clear an ACH we are going to be cutting it really close.
AGAIN. Grrrr....I just want this card GONE! Tonight I am going to take the card out of DH's wallet and put it into the lock box. Or better yet, shred it. *insert sinister laugh here*
April 4th, 2007 at 04:38 pm 1175701138
Good luck with whatever you choose to do.
April 4th, 2007 at 05:05 pm 1175702750
Once everything is paid off then it is better to close them, but only one at a a time and wait 6 months between. i would consider the american TV one, but then again it would impact your credit ratio.
April 4th, 2007 at 06:11 pm 1175706680
But the other question is how well do you feel that you can hold yourself accountable and not use that card. If you feel its going to be too much of a temptation, I would say go ahead and close it. Because ultimately low debt is a good thing.
April 4th, 2007 at 06:28 pm 1175707697
April 4th, 2007 at 07:02 pm 1175709758
No Annual Fee? If the card has no annual fee and you're concerned about your FICO score, don't cancel it. Just put it away someplace really secure (like your safety deposit box).
Annual Fee? If you are paying an annual fee, you may want to cancel the card. But Suze says don't cancel more than one card per year, and start with the one that has the lowest credit limit.
April 4th, 2007 at 08:41 pm 1175715666
April 4th, 2007 at 08:59 pm 1175716789
April 4th, 2007 at 10:41 pm 1175722885
April 5th, 2007 at 12:42 am 1175730131
When you have an excellent credit score I see all of this hooha to keep open accounts as nonsense. I just closed my oldest card erasing the first 6 years of my credit history. It is such a small piece of my score it mattered little - still in the 800s. I Was really scared it would affect my score more, but then again I figured how bad could it be. In the end I find much ado about nothing. I didn't want to pay the annual fee on a card I haven't used in years - I made the right choice.
If you have a score you are trying to improve and you need every edge you can get, then I wouldn't close them. But you have to consider and weigh all the other factors as well. Something in your current standing could be hurting you, a closed car could pay off. There is more to your score than history.
I always have to say something when these discussions come up because logic seems to go out the window sometimes in the fear of credit score.
Good Luck!
April 5th, 2007 at 12:59 am 1175731185
April 6th, 2007 at 01:33 am 1175819593