credit cards-what to do?

DH and I are aggresively paying off credit cards this year. I am ashamed to say we have a lot of debt (all from the college/law school days) but still....
So, we realize we do not need all of the cards we have. Is it a bad thing to close them after paying them off? We are going to leave at least 2 open...but we disagreeing about the other cards.
I worry about our credit-debt ratio....
He just wants to close everything! HELP

Re: credit cards-what to do?

Maybe try closing down the one's to specific stores that you don't use very often - those usually have the highest interest rates.

DH and I are in the process of doing the same thing. We're going to try to keep 2 or 3... def one with the lowest interest rate, then they one that has perks, but maybe a bit of a higher rate.

In college I was way too swayed by all the 'save 10% by opening an account' promotions

Good luck!

Re: credit cards-what to do?

If you close anything, make sure that you request that they make a notation and even send you a letter that customer requests the accounts to close. Try this site

closing credit cards

I have called in the past, rather than writing a letter, but made sure to say that I was the one wanting to close it.

Re: credit cards-what to do?

If you are thinking about buying a house soon, I would say don't close them. If you close too many, it could affect your credit score. It might be better to just put those cards away in a safe place and not use them.

I would probably close the store accounts, though. The credit limits on those are usually lower anyway and to me, it is just added tempatation.

Re: credit cards-what to do?

DH works with mortgages and he said that you should at least keep the one you have had the longest open. Other than that, it really doesn't matter whether you leave the rest open or closed. As long as you don't have any balance on them, it won't affect your credit score adversely.

Re: credit cards-what to do?

I'd just put them away somewhere----a safe deposit box, a safe in the house, etc.

Keep them, just don't use them.

You could even cut them up if you wanted to. I wouldn't close them.

Re: credit cards-what to do?

None of them are store accounts...
We are looking to buy a house within a year

Re: credit cards-what to do?

Re: credit cards-what to do?

okay, i'm naive. Why does closing an account hurt your credit score if you've paid it off?

Re: credit cards-what to do?

I would keep at least 5 open. And be responsible and use them and pay them off. You will see a great rise in your credit score.

The ratio matters soooo much more then people think.

When you apply for a loan, if you have little credit, they wonder why you need the loan. If you have the right ratio, it makes more sense.

When your looking to get a house, a good broker or mortgage agent should know and explain all this to you....

Re: credit cards-what to do?

Re: credit cards-what to do?

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Re: credit cards-what to do?

Posted by VirginiaDeb

Posted by dpli

Posted by VirginiaDeb

okay, i'm naive. Why does closing an account hurt your credit score if you've paid it off?

This article goes into it a bit:
credit article

This part in particular explains it:
The credit score looks at the difference between your available credit and what you’re using. Shut down accounts, and your total available credit shrinks, making your balances loom larger, which typically hurts your score.

hmm. i see. DH once told me though that if we have all this available credit that a bank might say 'but what's to stop you from going out and maxing out all of your credit cards' or something. Is there any truth to this? Or is this just DH being mean about the fact that I am too easily swayed by saving 10% on my first credit card purchase

Re: credit cards-what to do?

Posted by dm24angel

Posted by VirginiaDeb

Posted by dpli

Posted by VirginiaDeb

okay, i'm naive. Why does closing an account hurt your credit score if you've paid it off?

This article goes into it a bit:
credit article

This part in particular explains it:
The credit score looks at the difference between your available credit and what you’re using. Shut down accounts, and your total available credit shrinks, making your balances loom larger, which typically hurts your score.

hmm. i see. DH once told me though that if we have all this available credit that a bank might say 'but what's to stop you from going out and maxing out all of your credit cards' or something. Is there any truth to this? Or is this just DH being mean about the fact that I am too easily swayed by saving 10% on my first credit card purchase

LOL!

The thing is to have the "Right" ratio...You could have too many cards very easily....

You can find a lot of info online, in books, Suze Orman I think goes into this as well about what the "perfect" ratio is ...