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maxsgirl
LIF Adult
Member since 1/06 2086 total posts
Name:
sarah
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Closing Credit card with a balance
Does it hurt your credit if you close a credit card that you currently owe a balance on?
DH has just requested that the company close his account altho he still owes a rather large balance, a few thousand. We've been working on paying down and havent used the account for a long time now.
The CC company had sent him a notice because they were raising his interest rates to some insane amount. He didnt want to pay it b/c it would significantly increase the monthly payments.
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Posted 11/17/09 10:32 AM  |
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Shorty
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Member since 5/05 30390 total posts
Name:
really
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Re: Closing Credit card with a balance
i wouldn't close it, but I'd shred the card so it doesn't get used.
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| Posted 11/17/09 10:37 AM |
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OStewarts
LIF Adult
Member since 11/07 1096 total posts
Name:
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Re: Closing Credit card with a balance
Yes, it will likely hurt his score because he is lowering the overall amount of credit that he has available to him. Thus, the amount of debt that he has, in proportion to the outstanding available credit on all of his cards, is higher than it was before he closed the card.
ETA: It may also hurt his score if he has the card for a long time.
Message edited 11/17/2009 10:49:52 AM.
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| Posted 11/17/09 10:48 AM |
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sweetie
Member since 8/06 1730 total posts
Name:
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Re: Closing Credit card with a balance
I would close it. It may slightly lower your credit score but if you're actively paying it down, your score will eventually go back up. If you keep it open, you will just be paying more & it will take longer to pay off
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| Posted 11/17/09 10:50 AM |
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: Closing Credit card with a balance
Posted by Shorty
i wouldn't close it, but I'd shred the card so it doesn't get used.
I think if you close it you avoid the rate increase, so you still have to pay it off but you can't use it anymore.
I have done this before and I don't think it hurt my credit.
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| Posted 11/17/09 10:51 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Closing Credit card with a balance
Posted by sweetie
I would close it. It may slightly lower your credit score but if you're actively paying it down, your score will eventually go back up. If you keep it open, you will just be paying more & it will take longer to pay off
agreed- I closed a few all with high balances and there was little effect on my score
I think taking the lower rate is smarter then paying extra interest to maybe save a point or 2
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| Posted 11/17/09 12:05 PM |
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maxsgirl
LIF Adult
Member since 1/06 2086 total posts
Name:
sarah
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Re: Closing Credit card with a balance
Thanks everyone.... he closed it but I just wasnt sure how drastic the change might be to credit score. It doesnt seem that drastic considering the alternative to paying more in interest each month.
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| Posted 11/17/09 1:38 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Closing Credit card with a balance
It will only hurt your score if you have very few other active credit cards. If he has like 6-8 other credit cards, it shouldn't make a difference.
If it's his oldest card, and his next oldest card is say 10 years newer, that may lower the score a bit.
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| Posted 11/17/09 2:18 PM |
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