Credit Cards - Washington,DC

I don't think you are supposed to close credit cards when you pay them off. You can cut them up and never use them again, but you need to keep them open so it shows that you have a good history.
We do not use any credit cards at all. We are paying off 1 card that will take possibly another 5 years to pay off but we can not use it. It has been frozen by the bank and we do not even have the card. I have great credit, my husband has terrible credit. Since I stay home, I can't open a card unless he co signs but he can't do that because of his credit. He can't get approved. So, we do not have one. Not even for emergencies.
If I were you, I would just cut them up, but keep the account open so it shows a good credit history for you :)

Close as many as you can.

We have Zero CC's anymore.

I would also get what you can paid down ASAP.

If there is an emergency or something like that that taps you out completely for money the CC's will be the first thing to sink you. Once you are behind on those Payments, yikes, there is no going back to ''normal'' after that.

Just my two cents. I am glad my credit score is shot to hell and no one wants to even attempt to give me a CC. Because that means I am NOT going to spend money I have not ever truly seen...and will never actually have.

Call them, Cancel them, Cut them up....as soon as you can:)

I've heard that you shouldn't close them because it can negatively effect your credit (you had 20k in credit and after closing two now only have 10k in credit) something about your debt to credit ratio rising?

Just cut them up and throw them away...I'm of the opinion it's better to have access you aren't using then close it. What if something catastophic happens and you really need that line of credit? I know not ideal - but sometimes I think worst case and if for some reason we both lost our jobs I'd like to know that I could exist even if it was on credit.

hopefully I'll never have to test this theory. :-)

As for the second question - I have a handful of cards I've been trying to pay off for 2 years - I've cut our balance in half but still have a ways to go. I love my Kohls card and if you have that I would keep it - I always pay the balance off and love the discounts.

Do not close them as you lose you history with that card, the crazy thing if it is a good history for sure keep it open and if it is bad, it doesn't go away anyway. Pay them off and leave them open.(I have a STAR card too and I can't seem to shake it, I love the base stores!)

We have one card for emergencies. We have 2 AMEX to use alternating months, pay them off as they are due.

I have one card for situations where I HAVE to have a card (like renting a car). For emergencies I have an emergency fund in my savings account.

The problem with cards is that they affect your credit score if you have too many. But BE CAREFUL about transferring all those cards onto one. You don't want your one card to get anywhere near your max limit. That also affects your credit. So if you have to keep two cards at, say 30% of their limit instead of one card at above 50%, do that.

Do Not close cards unless they have an annual fee. Cut them up, but don't close the account. I will give you two common sense reasons. This is not

1) Closing a card is a red flag that you can't handle credit. It negatively impacts your credit. I have had to turn people down for loans that had no late payments, simply because they had closed cards.

2) Available Household Credit. Right now, your credit limint is very high, if you add your limit up on all cards. The amount you have borrowed is taking up a small percentage of it. That says that you can handle a high limit and improves your score. If you close out cards, you reduce your available household credit limit, making the debt you do have take up a higher percentage of your available credit. That makes it look like your household is "maxing out" your resources. That makes interest rates higher the next time you want to borrow money for a home or car.

I personally hate monthly bills. We have one credit card and it is nice to have for emergencies (It's been a long time since we've had an emergency that has exceeded what we could afford out of savings...and that was when my husband had massive surgery that we weren't expecting and left him out of work for 6 months)...but I would never get more than that one. It is extremely rare that we don't pay it off at the end of the month. It's nice for when we've rented cars, gotten hotel rooms, paid for things online, etc. - but I suppose you could use a debit card for those things as well (?). If closing them and cutting them up lowers your credit score...than there is something wrong with the system (which there totally could be...wouldn't surprise me!) We have always had excellent credit every time I've checked. Seems like having more credit cards than you can afford would be worse for your credit...and having that many, I'm sure I would rack up bills I couldn't pay off or forget to pay one one month...or something!

So long as all the open credit isn't hurting you closing them will hurt your credit. What I mean by open credit is make sure you don't have so much open credit that say you went nuts and maxed them all you would have some serious debt to income ratio issues, they take that into account as well.

Dave Ramsay advises that you close them.
Why are you concerned with your credit score? If it's not deemed "bad" now, I highly doubt that closing a few cards will do anything. I'm a believer that "credit" is largely a manufactured American Myth.

A good income and no prior "bad" credit (in the case of borrowing for a house, which is the only thing I might borrow money for) is just fine in most cases--but then again--no credit cards--no need for "good" credit.
If your goal is to get rid of credit in your life, then who cares what your "credit score" is anyway?

Once we funded an emergency fund, there is no need for a credit card for emergencies. A debit card/MC/Visa will work just fine in place of any other credit card--and we'll only be spending money we have.
Personally, I'd follow the DR plan & pay them off O. by O., smallest to largest, regardless of the interest rate. Don't get caught up with the shuttling them around to zero rate cards--just PAY them off!
IF you choose to keep O. open, keep the O. with no annual fee and the O. you've had the longest.

Oh--as for Kohl's (and many other store card scams that force you into using your card for discounts)just pay it off right at the register after your transaction. That's what I do. Plan ahead & take the cash with you. Many plan to do this but don't quite follow through. If that sounds like you, then close it. It will save you more in the long run than the Kohl's coupons, right?

Do Not close cards unless they have an annual fee. Cut them up, but don't close the account. I will give you two common sense reasons.
1) Closing a card is a red flag that you can't handle credit. It negatively impacts your credit. I have had to turn people down for loans that had no late payments, simply because they had closed cards.

2) Available Household Credit. Right now, your credit limint is very high, if you add your limit up on all cards. The amount you have borrowed is taking up a small percentage of it. That says that you can handle a high limit and improves your score. If you close out cards, you reduce your available household credit limit, making the debt you do have take up a higher percentage of your available credit. That makes it look like your household is "maxing out" your resources. That makes interest rates higher the next time you want to borrow money for a home or car.

We have ZERO credit cards. I dont see the point in them besides causing problems and paying unnecessary fees.
Our credit is just fine without them.
My suggestion is to cut them up, pay them off and close them out.
Having high limit credit cards can actually go against your credit, debt-income. Even if you do not have high balances, you still have access to that amount.

i really really hate the complicated dance the credit companies have created. no credit? bad score. too much credit? bad score. no late payments but too many cards? bad score. 1 late payment in 20 years of perfection? bad score.
i am livid with congress for not protecting us from this degree of shark financial manipulation, but debating endlessly what i should do with my uterus and granting themselves more benefits.
sorry. unavoidable rant.
i strongly suggest making a one-time payment to a good mortgage or financial specialist to get thoughtful, educated advice on just what to do. sometimes closing credit card accounts helps you. but it can do just the opposite too. consolidating can seem like a great idea, but you have to watch what it does to your debt-to-income ratio.
my husband and i have excellent credit. over the years we've pared our credit cards down to one, our emergency card. it always has a balance of a few thousand because emergencies are a part of life, but it's never out of control, and it's the only one we have. and every credit report we've pulled for the last 3 decades has said 'revolving credit too high.' even when we've had it at zero.
i think it's probably best to close many of yours, that really is a lot. but as to how exactly it will affect your score? since the credit companies keep their criteria more secret than a nuclear bomb formula, there's no way to know. it's in the financial community's best interest to keep you on the edge, anxious and in the dark. don't bother trying to call equifax or transunion. talk to someone in the business, who has access to underwriters and is involved in credit score tweaking as part of their daily work. even their advice won't be picture perfect, but they can probably give you a better guesstimate based on your particular unique situation.
khairete
S.

We have 2 no fee credit cards that we pay off every months. They have a decent limit - enough that it would cover all sorts of emergencies. They don't have 0% interest but since we pay them off it doesn't matter. The thought of spending so much on credit that I'm unable to pay it off at the end of the months scares me. I always make sure that we safe up before we spend the money, i.e. for vacation. I mostly use the credit cards for online shopping, booking vacation or hotels online.

Rachel:

There are sooo many myths and misinformation out there.

There are sooo many new rules out there as well. No kidding. Since Clinton's Dream Act and the foreclosure's that happened because of it - lending has changed and the rules for lending have changed.

Call USAA - you bank with them - ask to speak to a financial adviser and tell them what you told us - they will work WITH you to get you where you want to be withOUT hurting your credit rating.

https://www.usaa.com/inet/pages/financial_planning_select...

yes - this particular link says "retirement" but when you call and tell them what you are trying to do - they will help you maneuver the new rules and get you where you want to be.

As to credit cards? I have NONE. Bob just got one - AMEX through USAA in January. We put $100 on it a month and pay it off every month. Other than that? We don't do credit cards - everything is cash only. After the last year we have had - you know our situation - we will be buying a newer car for me soon and that will be on credit...however...we plan on refinancing the house (USAA just preapproved us for 3.8125% interest rate and we'll take equity out and do things around the house and most likely pay the car off). ..

I personally don't like credit cards. I think they are evil (well, I have a love hate relationship for them!! Like Obama-I know how to spend money!!!! :) ) and when we went cash only in '06 - I can tell you it was a HUGE change...especially when you have a credit card that has a $35K limit on it...I would much prefer cash only. I LOVE not getting bills in the mail every month - other than gas, electric, water, etc. - it's VERY easy to budget when you use cash only!!!

pay off your credit cards, one at a time if you have to. i was paying an extra fifty dollars a month just for the "privilege" of having the card !! ms. hawkins-adams, she writes a column in the newspaper called DOLLARS AND SENSE, spurred me to take a closer look at how much i was ACTUALLY paying just to have a piece of "magic plastic" in my wallet.
K. h.

the way it works is a company looks at your credit for the past two years...they cant see what happened before that unless the company put it in a comment section (very rare).

i would keep the cards you have PAID ON TIME FOR THE PAST 2 YEARS. two or three should be enough. if you arent wanting to have them because of temptation then only get ones that are or gas only or like a kohls card only for their store. and then make sure you pay the total amount each bill.

another thing that affects your score is the debt to income ratio or amount able to borrow/use. so the cards that you do keep call them up and lower the amount you can borrow/spend on the card. you can always call a card up and have them raise your limit again and if it was already that high before the chances of them raising it back up right then and there is pretty good.

another idea is to keep that card in the freezer in a block of ice. this makes you have to think long and hard about wether you should make that purchase while it thaws.

you want to have some sort of bill every month that will turn in your bill status to the burough each month. your regular power and water won't. your mortgage and car payments will and student loans or even the hospital. but if you only have one of these i'd think about getting that gas card and using it for gas only. discover gives 5% back i believe on gas purchases so that helps too. i know others that have all of their normal bills like power, water , internet and phone be billed to their credit card so that they get points or money back and then they use that money they earned to buy christmas presents that year. you were going to pay those bills anyway so this is a nice way to do it where you won't even have to hold the card you can keep it in the freezer where it's safe from your hands yet still be making you money and saving you money at the same time.

if you do transfer your balances to a 0% card make sure you watch to see what they will charge you to do that. some charge 3% of the ballance but otherscharge more like 5%. at this ppoint depending on the amount you owe and how many months you will be at the 0% you may not be saving anything. and try to get the ones that go for 18 months...i wouldnt transfer to anything that gave me less than 12 months.

good luck on your journey to financial freedom:)

if anyone reading this is interested in going to a class that teaches financial freedom i know that first baptist church of norfolk has them on occasion. check out their website at firstnorfolk.org or call them to see when a new one will start. they are on their second week of one right now that meets wednesday nights at 6pm if anyone is interested.