Credit Savvy Moms...

Updated on May 23, 2010
L.P. asks from Uniontown, PA
16 answers

I need some info from any of you finance savvy moms out there with education or knowledge about credit and credit scores...

I recently paid off a high interest credit card (yeah!) that has a $9000 limit. I am trying to find out if it is better for my credit score to close the account altogether, or to leave it open, with no balance. I do NOT intend to use this card again. I have another card with a much lower interest rate, that I carry a small balance on, and pay at least twice the minimum payment on each month, unless I am able to pay it off in a given month. I think that somewhere along the line I was told that having too much "available" credit can affect your score, even if you don't carry a balance on that available credit. Does that make sense? I am probably going to be applying for a mortgage sometime within the next year, and I am trying to tidy up my credit score as much as possible! To that end, ALL suggestions are welcome!

Thanks, moms!!

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So What Happened?

With just the few responses I got already, I believe I will keep the card open! I had used it in the past just for gas, then paid it off each month. I think I may start doing that again. Plus, I do get rewards on the card, so that's a plus too!

THANK YOU all for your knowledgeable responses!

Featured Answers



answers from Pittsburgh on

I disagree with the people saying to keep it open and use it. I tend to follow Dave Ramsay's principles and we use debit cards for just about everything!

1 mom found this helpful


answers from Allentown on

Hi, L.:

One credit card is enough. Cut up the others. The one with the least amount of interest is better.

Good luck. D.

More Answers



answers from Fort Wayne on

Hey! You're in luck, because my husband and I are very knowledgeable with finances when it comes to increasing your credit score! My husband owns a mortgage company, so I know all about it. So...what you want to do is NOT close the account, and instead, keep a small running balance on it. It's a good idea to keep about $100- $200 balance on credit cards, and make about twice the minimum payment. One thing I do is each month I charge 2 weeks worth of groceries on a credit card. That way I know that I'm keeping money on it, and helping my credit score. My score is 822, which is close to perfect. When you close out accounts, it negatively affects your credit score, and as long as you don't have tons of money available in credit, like $50,000 or more, depending on your income, then NO, having them open with funds available will NOT affect your ability to get a loan OR your credit score.

2 moms found this helpful


answers from Dallas on

Hi there,
Congrats on paying of your card! Woo-Hoo!!

I believe the best thing is to leave the card OPEN with a $0 balance for now. Also, it may take a bit for your credit score to go up as it takes time for all the stuff to get processed and start showing up.

Again, congrats,

1 mom found this helpful


answers from Indianapolis on

You do not want to close the credit card - it affects your credit score.

The best thing to do is to either keep the account open with a zero balance or use it for things like your groceries, cell phone bill, etc (things that are normal monthly expenses) and pay if off each month. Perhaps make it the 1 card you use for your monthly gas purchases and pay it off in full.

As a 19 year-old with no credit history, I learned quickly that you need to have credit to get credit, but in this day and age, you have to be really responsible with it. My husband was not right after college, and it really hurt him until this year. Our house, our cars, everything have had to be in my name because my credit score is so much higher and allowed us to get better rates than we could get with him on the loans.

Suze Orman is probably one of the best people to really discuss this topic and has done several episodes of Oprah about it. I'd highly recommend seeing what her advice is before you make a decision.

Good luck!

1 mom found this helpful


answers from San Antonio on

If you're worried about overspending on the card, call them up and ask to LOWER your available credit. My husband and I put a 500 dollar limit on our cards, that way also, if they were lost or stolen, not a huge deal. We are debt-free and feel wonderful not being tied to monthly bills. We use our debit card more often, as we get paid cash every time we swipe the card and use it as a credit instead of a debit. Be wary - if you keep a card with a zero balance, some credit cards are charging you for 'inactivity fees.' Ridiculous I know.

1 mom found this helpful


answers from Philadelphia on

Leave it open! It's the weirdest thing, I know... For some reason it really matters how much open credit you have, in ratio to your balances. Especially if there are no fee with the card. After you get your mortgage, then you can close it...



answers from Philadelphia on

Keep the card open but call to have them lower the limit to $500 or $1000. That keeps the card active but limits your temptation to spend alot again. Good luck with your mortgage!



answers from Scranton on

If you feel that it's going to be too much of a temptation to use it again, then I say close it. While I know that all the credit people will tell you it effects your credit, I don't really think it's that big of a deal. My dh paid off his, then closed an acct with a company he'd had an acct with for almost 15 yrs. He thought it would hurt his credit, well it didn't. And in fact when he went to get a new car loan, his credit was in fact just a few points shy of being perfect. So if you are making your payments on time close out whatever ones you don't need anymore.
But here is one thing to consider. Check with all your cc and find out which one is the most stable, lowest rates and offers YOU the most for you money! My dh has this one gas card I think it is for Gulf, he's had this card for a long time, recently they upped the rewards they were offering for gas, well he called them and they said he would have to cancel his current card and resubmit an application to get the new rewards. He checked into the fine print and found that the other card had more fees tied to it and was not as good of a deal in the long run, so we kept the old card.
Remember with all the new legislation there are a lot of fees, and hidden implications put in to keep the cc companies from loosing money. Always read the fine print!



answers from Charlotte on




answers from Philadelphia on

keep it open, it will show that you have all this credit available and you not using it, it should benefit you.



answers from Philadelphia on

As most of the others have said here, keep the card open to keep your FICO score higher. 2 good websites to check out stuff like this on are and Suze has her own show on CNBC and Jean is a regular contributor to the Today show and formerly had her own money show on Oprah XM.

Good luck and hope all goes well with the mortgage!

Oh, and if you're like a lot of us, the credit card company will probably lower your limit now that the card is paid off. That has happened to us several times in the past 6 months.



answers from Harrisburg on

The answers I read here are all appropriate in different situations, but you need to weigh your own. If you can control your spending and not use the card for anything you can't afford to pay off at the end of the month, and if the card is not charging an annual fee, then keep it and do not ask to lower the credit amount. Your credit score is helped by keeping a low debt to credit ratio, meaning that if you show that people are willing to extend you credit, but you are able to spend within your means and keep your debt low, that helps your credit score. I don't know what is considered a good debt to credit ratio, but I'm sure some quick research on the internet would tell you. I'd have to guess something less than 25%. Many financial experts give the advice to use debit cards only, but that advice is really for those people who find it too tempting to use credit cards and who are likely to get themselves in trouble by having available credit at the ready. Keep your card and don't use it, or if you do, pay it off every month... if you wish to get rid of it, do that after you've bought your house, and never keep a credit card that charges an annual fee.
Good luck!



answers from New York on

With the new credit card laws, the way credit scores are being calculated is changing. As always its very confusing. I've found a lot of good articles on in the money section.

To answer your questions, having to much available credit, this does effect your score, but not to much. The therory is if you have $50,000 of credit available and go out and use all of it, you won't be able to make the payments.

As far as keeping or closing the card. I would definetly keep it. And I would use it, but only once or twice every few months. Use it to fill up the car with gas and then pay it off each month. One of the best ways to get a good credit score it to use your credit and make timely payments.

Note on credit scores - two things that decrease your score drastically, 1) late payments 2) maxing out a card, if should never use over 80% of the amount available on the card, keep it under 50%.

Good luck



answers from Pittsburgh on

Leave it open, and use the card for like, a 10 dollar purchase every 4 months or so so they don't close your card. How long you've had your cards open impacts your credit score, so if you close it (or the credit card company does because you aren't using it) it will hurt your score.


answers from Pittsburgh on

I hope that I don't confuse you by this:

I am a HUGE Dave Ramsey fan ("Financial Peace University" CDs that I got on Amazon for $10 helped me get rid of $11,000 debt inside of three months).
I know Dave's attitudes towards credit reports/scores, but we do live in the real world and you do need credit for some things.
If you close the account, your score will lower.
People here say to lower your available credit on the card. I was told the opposite is true; the more available credit that you don't use, the better. I have a business loan that I am applying for and I have only one card that I use (for less of $100 every month and pay it immediately) that I just asked to raise the limit a few thousand dollars. It looks good that you have credit available that you choose not to use.
Hope that helps!

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