Credit Card Paid Off, Close the Account or Close it?
Discussion
Do you have other credit cards?...best way to get good credit is a good credit history. Use your credit card, stay with your limits and pay it off completely every month. Do not have dozens of the things. I have had two credit cards for eons, ( amex and Visa) which cover very possible need. Not using credit at all will ultimately give you a zero history. If it dupilcates another card, by all means close it
There are pro's and cons to closing or keeping the account open from a lenders point of view.
Some lenders will attribute you a higher score if you have credit available to you that you are not using, meaning you are living within your means despite having credit available. Other lenders will look at the credit limit and think "if this client max's out his credit limits on his cards, will he be able to afford our loan/CC/HP" etc.
Either way there's probably not much in it.
Some lenders will attribute you a higher score if you have credit available to you that you are not using, meaning you are living within your means despite having credit available. Other lenders will look at the credit limit and think "if this client max's out his credit limits on his cards, will he be able to afford our loan/CC/HP" etc.
Either way there's probably not much in it.
The stance from most credit companies is that it is better to have a credit agreement with a lender, and stay within the limit. Than have no history what so ever.
I think what a lot of people forget when they are considering their credit score, is that when companies do a credit search, they have a look at your credit report and from this take in to account all kinds of things. The main two for them is risk, and profitability. If you have a credit card for instance, and pay it off every month and never run into any interest... put yourself in the lenders position and ask yourself, what rewards am I going to get from the risk I'm taking?
Having said that, if I were you, I would lower the limit to something small like 1k, and just put your daily spending on it, pay it off at the end of every month. If you plan on getting a lot of credit, just go 2-3 months where you pay a little interest on it, the lenders should look at you as a profitable investment and lend you a higher amount
I think what a lot of people forget when they are considering their credit score, is that when companies do a credit search, they have a look at your credit report and from this take in to account all kinds of things. The main two for them is risk, and profitability. If you have a credit card for instance, and pay it off every month and never run into any interest... put yourself in the lenders position and ask yourself, what rewards am I going to get from the risk I'm taking?
Having said that, if I were you, I would lower the limit to something small like 1k, and just put your daily spending on it, pay it off at the end of every month. If you plan on getting a lot of credit, just go 2-3 months where you pay a little interest on it, the lenders should look at you as a profitable investment and lend you a higher amount
Funnily enough I had this dialema on Friday, I weighed up the options and decided to close the account.
The effect on your 'credit score' either way will be marginal, not enough to worry about anyway. The settled account will show on your credit file and will help your 'score' slightly.
It does feel odd not having a credit card 'just in case', but does feel good paying off debt also.
The effect on your 'credit score' either way will be marginal, not enough to worry about anyway. The settled account will show on your credit file and will help your 'score' slightly.
It does feel odd not having a credit card 'just in case', but does feel good paying off debt also.
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