Peteresque
4 Answers
Vinny
Lets look at this with common sense. If you have a credit card with a line of 10K, this means you are pre-approved for 10K.. Lts then say you have another one for 10K, different company but also pre-approved.. Both untapped and sitting in your wallet.
The way the finance companies look at this is that you have potentially 20K worth of pre-approved credit that you could use at will, this means that the loan they are thinking of securing in your name could possibly be at risk if you use those cards. today more than ever before they look at this very seriously.. Where I said it would help your credit rating is simply because you do not have these potential risk attached to you.. Simple! You may not like it but this is the way they think.
Of course paying off your card monthly not only helps your score but also denies them of interest charges. If you are not using a card, get rid of it. I would in the past, clip the corner off of it and send it back, this is no longer necessary, just call them and cancel. Easy as pie!
The way the finance companies look at this is that you have potentially 20K worth of pre-approved credit that you could use at will, this means that the loan they are thinking of securing in your name could possibly be at risk if you use those cards. today more than ever before they look at this very seriously.. Where I said it would help your credit rating is simply because you do not have these potential risk attached to you.. Simple! You may not like it but this is the way they think.
Of course paying off your card monthly not only helps your score but also denies them of interest charges. If you are not using a card, get rid of it. I would in the past, clip the corner off of it and send it back, this is no longer necessary, just call them and cancel. Easy as pie!
| 12 years ago. Rating: 0 | |
Gary, I deal in finance, its part of my job, you are giving the wrong advice here.. I deal with high end credit card charges every day, also I deal with security loans every day, I spend a good portion of my day talking to these finance agents. You are dead--dead wrong on this my friend on the left.. I suggest that if you are going to give advice to people, please do your research.. Ruining a persons credit just because you have a vendetta against me for another post at another time is just not right. You are putting this person in the middle..
gary
Vinny
| 12 years ago. Rating: 0 | |
Clark Howard recommends not to cancel credit cards but to pay them down and stop charging on them. He is not only quite a conservative but considers himself "cheap".
Clark Howard is correct about paying them down, this is a given. he is obviously trying to help those avoid having their credit scores go down.. This is sound advice.. What I am talking about is not about ruining your credit score but rather not having a potential debt that lenders see as risk. This is not what Clark is talking about. IMO, it is always good to have a card ready for emergency, I have cards that I use for anything I purchase that is over 250 bucks, including flights and services, I also pay them off at billing. I use the cards for only one reason, for protection if something goes wrong with the purchase and you end up in a disagreement with the seller or service provider.. This is where having a credit card pays off.. The card company will assume all legal action in your behalf. Also, of course, emergencies. Other than the one card I have less my gas card, my potential debt is based on the credit line of my cards. Fortunately, I have outstanding credit and I don't see the need at this time to use someone else's money but if I did, they will also have my 'potential debt' to consider.. :)
No! it will actually help your credit rating by cancelling. Credit agencies look at credit cards as 'potential debt' means that whatever your credit limit is on your card, even if you don't use it, they regard it as possible future debt.. They consider this strongly if you apply for a loan.
it is always best to cancel any unused credit cards..
it is always best to cancel any unused credit cards..
| 12 years ago. Rating: -1 | |
gary
YES IT WILL HURT YOUR CREDIT SCORE. Let's say your current card allows you to charge up to $10,000. That means your credit line is $10,000. When you cancel, it is now $0000000000. Don't cancel it. Activate it once every 6 months and pay in full when you do. If you owe several thousand dollars, pay it off and don't charge anything more till you do. If you apply for a loan, you will have NO CREDIT LINE if you cancel the card.
| 12 years ago. Rating: -1 | |
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