What do I do with unwanted credit cards?
Now that I’m lookin to purchase a house, I took out a loan witha great rate from my alumni credit union to pay off credit cards. So now that the loan is the only debt I have, should I close most of the credit card accounts? Or will this hurt my credit score when it comes time to get a mortgage? There are 4 cards in total should I just cancel one or two?
Tags: Cards, Credit, credit card account, credit cards, unwanted
I would cancel them if your not using them, close those accounts and cut up the cards. Even if there is no balance on the card, on your credit report they look at it as potential debt. You might want to keep a Visa or Master Card for emergencies but I would cancel the rest.
Try and close them is what you are asking.
Good luck doing 1. Actually getting a Human on the phone in the first place, and 2. Getting them to close the account instead of just putting it on “snandby” like Discover does.
We couldn’t get them to cancel our account to save our lives.
If you are done with them, close them and shred the cards.
If you pay your bills on time, then you shouldn’t be worrying about your credit score so much.
If you don’t need them, get rid of them. Cut them up into the smallest pieces possible. Having credit cards has no bearing on your credit score after you’ve already got a credit score. Once you’ve established your credit then it carries forward through things as mundane as your utilities bill. If anything, it would be best to have only one active when you apply for your mortgage.
Yes, close them all, only keep one of the major cards, just in case you will need something..I have had only one card, for the last ten years, and my credit is excellent..Whenever you do charge something, on your card, just make sure that you make the payments, on time, if you don’t, that could go against your credit score..Take the cards that you are not going to use, and cut them up, with a pair of scissors, then discard..Good Luck..
Whoa! Don’t cancel them!!
Cut them up. Bury them. Send them to Mars. DO NOT CANCEL THEM!
They are actually helping your credit score!
Read Suze Orman’s Young Fabulous and Broke
You could send them to me. I promise to take care of them.
Seriously, put them in a safe deposit box for emergency use only or cut them up.
Cut them up and return to creditor with your request to close the account. The history remains for 7 years and the account is noted that it was closed at the request of the customer.
Thegoodjuan is the only one giving you good advice.
Let start with the mortgage qualification process. There are 3 major parts to mortgage quailfication. The property, what is it worth (appraisal) your debt to income ratio, and your FICO credit score.
Typically your debt to income ratio will need to be less than 45%. That means that all your monthly obligations can not add up to more than 45% of your Gross Monthly Income.
Most credit experts believe that the average person should have between 3-5 open revolving credit lines(department, gas, Visa/Mastercard, Discover, Amex, etc.) to obtain you maximum score. Since you are right their with 4 I wouldn’t close them right now.
Also remember credit reporting lag, i.e., you pay off your credit cards in full in February but you may not see that reflected in your credit reports for up to 90 days.
Unless you are in a hurry I would wait about 60 days and then go buy (costs $45.00) your FICO credit scores at http://www.myfico.com/12 and see where you stand. They will also give you the top 4 reasons why your credit scores aren’t higher. By that time you will probably see your cards showing zero balances.
Good Luck
Looking at America’s consumer credit debt I wabt to say cut them all up and put them trash. What I will say is keep one and use it sparingly. The company will report to the agency how quickly you pay. You must make your paments on time.
Whoa whoa whoa!!! Don’t Close Those Cards!!! If you don’t intend to use them just cut them up; shred them; something to keep them out of your reach and not eassily accessible. Whatever you do don’t close the cards. That’s a mistake many people make. By closing the cards you are also eliminating all (that’s right ALL) of the history which is associated with the cards: your activity; your prompt payments; your balances; your only proven ability to pay debt over time. In addition, when future (new) creditors are conducting their credit evaluation of you they look at several things: (a) credit history; (b) total available credit; (c) total outstanding credit; and (d) the ratio of outstanding credit to available credit. So – if you keep the cards open and include the new loan – if your total available credit is 10,000 and you only have 3,000 outstanding (the new loan to pay off old debt) you have a 30% balance to total debt ratio. BUT if you close the cards all you have now is the one loan for 3,000 and available credit of 3,000…thus a 100% ratio. That’s not gonna help you.
You should continue to use one of those cards for “basic essentials” (gas, groceries) and pay it off monthly for the sole purpose of showing your continued ability to pay ongoing revolving debt.
Good luck!