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fashionista L · Coach

credit question...

lsubatgirl · Gucci

It depends on what cards they are and how long you've had them. If they are the first ones you ever opened and its a Visa or the like DO NOT close them. It will kill your score because it will think you have no credit history. Just keep them open and charge something on them every month or so (even if its a $2.00 candy purchase). If they are fairly recent or store credit cards then cancel a few but not all of them (cancel store cards 1st).

crystal · Kate Spade

hey fashionista L, well, if u pay off all ur cards at once & don't plan on charging very much on them at one time then feel free to close some (only close the most recently opened ones so ur credit history will be longer- a good thing). if u are paying them off one at a time over time then there is no rush to close them since the way ur credit score is determined is by the percent of debt. therefore if u have 3 cards, card A has a limit of $500 w/ a balance of $200, card B has a limit of 1000 w/ a balance of 300 and card C has a limit of 3000 w/ a balance of 1500, then ur percent of debt is 44%. the idea is to minimize ur percent of debt so if u pay off card C & close it, ur percent of debt will actually go up to 49%. whereas if u pay it off & do not close it, ur percent will go down to 38%. in order to minimize temptation, i just leave cards i do not use at home in a drawer.

on the other hand, it's not good to have a lot of cards open so let's say u have a card that u've haven't had that long & the limit is small anyways, then closing it may be a good idea. oh, & i'm sure u know to pay off cards w/ highest interest first. anyways, just so u know ur credit report/score is a snapshot of ur credit on any given day so let's say u pay off ur balance every month but during the month u max out ur card. if the snapshot is taken when ur card is maxed out ur credit score will reflect that. try not to charge more than 50% on any one card at any one time, even if u plan on paying it all off at the end of the month. i've done a lot of research on this stuff in prep to buy a car . sites w/ finance sections like msn.com or stuff like that are really helpful. good luck & pm me if u have q's on what i wrote.... sorry so long!

ETA: damn, i took so long lsu beat me to the punch... and a lot less wordy!!

-- Edited by crystal at 17:26, 2005-01-24

trixie · Kenneth Cole

This is what I learned from my very financial-minded friend (who sounds right but please correct me if I'm wrong).

The thing to consider is how long have you had this card that you want to cancel? How many other credit cards do you have and how long have you had those?

Basically you don't want to cancel off the credit card that you have had for the longest time period. Unless you have a mortgage or car loan, this card is probably the backbone of your credit report.

I also found this article that goes into more detail, and gives you more things to think about when closing a cc. HTH!

http://www.fool.com/News/mft/2004/mft04083001.htm

lsubatgirl · Gucci

haha crystal. I like your explanations though. Are you in finance? I might have to chat with you some on the issue. My bf has debt and we are going to have to start managing it next year. Plus I love talking about stuff like this.

crystal · Kate Spade

not "in finance" but love the topic. i'm a big suze orman fan (don't have cable right now & miss her dearly). plus, i'm in a bit of debt myself so always looking for ways to get out of it. suprisingly my FICO is pretty good but i think that's mostly cuz i've had a CC since i was 18 & never made a late payment, despite the fact that i keep a balance

. anyways, PM/myspace msg. me anytime! i've done lots of research & have a somewhat photographic memory so i can recall facts pretty easily. ttyl!