topic Re: Credit Cards-not right in Community Chat

Credit Cards-not right

FlowerBear — Fri, 05 Apr 2019 16:21:54 GMT

I dont feel it is right that you can get a hit to your credit

if you cancel a credit card! Is this true? I Have NEVER cancelled one!

I have heard this is true, but sometimes you just dont want the credit card any longer or to shop at that store or whatever.

Plus it is not your fault if you dont use your card and they cancel it like just happened to me at TJ Maxx. It is not in our town and I dont get there very often and hadnt used the card in a while and when I went there, found out it was cancelled when I went to pay.

Also what about if a store closes? I used to use my cards at two stores in the town over from here , that have closed, thus 3 credit cards closed NOT my fault!

Re: Credit Cards-not right

Johnnyeager — Fri, 05 Apr 2019 12:52:09 GMT

Yes, it can have an impact. FICO scores take into consideration your total available credit as matched against outstanding balances (Credit Utilization Ratio). It can be helpful to have available credit even if you don't use it.

Re: Credit Cards-not right

fthunt — Fri, 05 Apr 2019 13:02:25 GMT

If a store cancels your card due to 'inactivity'...there's nothing you can do about it......so don't worry. Stores do clean up their records from time to time. (probably during accountant audit)

You're fine if you have 1 or 2 cards that you use often & never late with payment.........that's what your credit score is based on.

Re: Credit Cards-not right

NicksmomESQ — Fri, 05 Apr 2019 13:03:47 GMT

Yes, it’s true.I never cancel credit cards.I either put the unused ones in a safe place or I shred them.

Re: Credit Cards-not right

nomless — Fri, 05 Apr 2019 13:05:09 GMT

@FlowerBear

Closing a card may affect your acvount because after closing it, the amount of credit available yo you is less. For example, say you have 2 cards each with a $10k limit. Total credit available to you is $20k. If you close one of the cards, you only have $10k credit available. That's why your score may take a hit. How big of a hit is dependent on the credit limit of the card you are closing. If it represents only a small portion of your total credit, the impact is less.

But according to this article, if the balance on all your cards is $0, so that your credit utilization is 0, your credit score will not be affected if you close one.

This article explains the impact of closing a card.

Re: Credit Cards-not right

Johnnyeager — Fri, 05 Apr 2019 13:11:27 GMT

FICO scoring uses the following:

On Time Payments

Oldest Credit Line

Credit Used

Recent Inquiries

New Accounts

Amount of Available Credit

Credit Ratio: Credit Used/Available Credit

I check mine from two different sources at least a couple of times a month (Not necessary for most people, but it's interesting to see the number move slightly one direction or the other). The different services weight the factors slightly differently, so the number can be different.

Re: Credit Cards-not right

on the bay — Fri, 05 Apr 2019 13:11:33 GMT

@FlowerBear -

I have always been hesitant to close/cancel a card because of that.

Recently I just really did not want to have a card I never used, and also because I know

many cards may cancel after a year if not used.

I also don't like to have a lot of different cards. I've read several times it is good to have 2 cards.

So, I searched the best way to cancel a credit card and good suggestions came up.

And that's what I followed and just cancelled a card I never used.

I don't have a specific website anymore but you can search google or whatever and there are good or better ways to cancel if you need to.

Re: Credit Cards-not right

millieshops — Fri, 05 Apr 2019 13:13:35 GMT

@FlowerBearFor most of us who use our credit responsibly, it's not as scary as it seems. I've never seen my credit score move at all when stores have gone out of business nor when I've let store cards lapse through non-use. Once upon a time, I had many cards, but no longer.

Once my bank cancelled a card with a large credit limit - did not effectively reduce my credit score and more important, I actually felt that protected me. No one was about to go buy a car and charge it to my account.

Re: Credit Cards-not right

scatcat — Fri, 05 Apr 2019 13:21:03 GMT

I wouldn’t be afraid to close a card. If you have good credit, closing a card is not going to plummet your score. It’s like you’re being bullied to not close a card.

Re: Credit Cards-not right

Trinity11 — Fri, 05 Apr 2019 13:44:16 GMT

We closed our Sears card and 4 other cards recently because we no longer use them. Our scores went down by a few points but the next month went right back up. I always get a message I need installment loans. I pay cash for cars so it's all just a scam to me. As long as I am close to 850, I am fine with it. Why would I want debt?

Re: Credit Cards-not right

RespectLife — Fri, 05 Apr 2019 14:14:21 GMT

@scatcat wrote:
I wouldn’t be afraid to close a card. If you have good credit, closing a card is not going to plummet your score. It’s like you’re being bullied to not close a card.

While closing a card will not 'plummet' your score, it will definitely affect it.

If that is a concern, don't close it yourself. Several points may not mean much to some of us...but depending on your circumstances...that could mean a lot.

If they go out of business, or close you for inactivity, that is not a hit. But closing it yourself, definitely is!

I agree w/ the previous poster, just secure them or shred them. It does you no harm to have multiple cards (unless you are buying things you can't afford!)

Re: Credit Cards-not right

geezerette — Fri, 05 Apr 2019 14:16:12 GMT

What bothers me about keeping a credit card open that I don’t use is the possibility of fraud. If someone hacks into either me or the bank, there’s a possibility they can get use of that card.

Granted, if I close a card, it may affect my credit score, but I have to weigh that against having to keep track of another account I’m not using, just in case.

Re: Credit Cards-not right

Trinity11 — Fri, 05 Apr 2019 14:24:31 GMT

@geezerette wrote:
What bothers me about keeping a credit card open that I don’t use is the possibility of fraud. If someone hacks into either me or the bank, there’s a possibility they can get use of that card.

Granted, if I close a card, it may affect my credit score, but I have to weigh that against having to keep track of another account I’m not using, just in case.

I completely agree @geezerette . My identity was stolen a few years ago and it took a few months to clear up. The more cards, the more time it took to clear up.

Re: Credit Cards-not right

geezerette — Fri, 05 Apr 2019 14:35:37 GMT

@Trinity11 wrote:
@geezerette wrote:
What bothers me about keeping a credit card open that I don’t use is the possibility of fraud. If someone hacks into either me or the bank, there’s a possibility they can get use of that card.

Granted, if I close a card, it may affect my credit score, but I have to weigh that against having to keep track of another account I’m not using, just in case.
I completely agree @geezerette . My identity was stolen a few years ago and it took a few months to clear up. The more cards, the more time it took to clear up.

@Trinity11

Sorry to hear that! What a hassle.

That’s what I’m afraid of.

Re: Credit Cards-not right

itsmagic — Fri, 05 Apr 2019 15:17:14 GMT

I agree with @geezerette I don’t want to have to keep track of a card I don’t use. In fact a few years ago I did close a credit card I never used and saw no real noticeable difference in my credit score.

Re: Credit Cards-not right

FlowerBear — Fri, 05 Apr 2019 16:23:33 GMT

How do you even know your credit score? I heard that if you check that also hurts your credit! I have no idea if true. I also dont know how you can find your score without hurting your credit!

Re: Credit Cards-not right

Johnnyeager — Fri, 05 Apr 2019 16:28:54 GMT

My bank (Capital One) gives me free service to my Transunion FICO score which is updated weekly. I use my app to check.

My American Express account provides a monthly update of my Experian FICO score.

They are similar, but can vary by a couple of points.

Neither impacts the score and you can check as often as you like.

Re: Credit Cards-not right

deeva — Sat, 06 Apr 2019 15:24:06 GMT

I've closed department store credit cards and my FICO score didn't change.

Probably because the credit limit was so low compared to bank cards it didn't matter,

Re: Credit Cards-not right

Mom2Dogs — Sat, 06 Apr 2019 15:49:16 GMT

We have two cards, one is a store card the other is a discover. Our credit score is very good...I have in the past closed out other store cards, it really did not make a lot of difference on our score...which honestly I don't care if it is high or low...we rarely borrow money won't be applying for a mortgage any time soon. The lender can look at our investments and make a decision about a loan....not gonna worry about keeping cards active.