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 S_2
Manic Depressive
Registered: 04/06/03
Posts: 5,426
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 credit card question
#8345711 - 04/30/08 11:53 AM (5 months, 8 days ago) |
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I've got a few hundred dollars left on a credit card that I've been managing very well over the last 6 months. I've got the money to just pay it off and forget about it. However, I read that closing a card hurts your credit score.
It was an introductory interest-free deal for the first 6 months. Have I been building credit these last 6 months, or does this "not count"?
Should I just leave, say, $500 on it and let them take my interest for the sake of building credit?
I made monthly payments on my car for about 2 years then decided to just pay the whole thing off. I've also had cards where I've spent $2,000-$5,000 and just paid it off in the next billing cycle. Was this a mistake?
Thanks guys.
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Though I am old enough to have discovered that the dreams of youth are not to be realized in this state of existence yet I think it would be the next greatest happiness always to be allowed to look under the eyelids of time and contemplate the perfect steadily with the clear understanding that I do not attain to it.
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Veritas
Registered: 04/15/05
Posts: 9,772
Loc: PNW
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Re: credit card question [Re: S_2]
#8345718 - 04/30/08 11:56 AM (5 months, 8 days ago) |
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Closing the account will reduce your total credit available, which lowers your score. Paying the balance and leaving the account open, however, will increase your total credit available, and increase your score.
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If people stopped looking on their emotions as ethereal, almost inhuman processes, and realistically viewed them as being largely composed of perceptions, thoughts, evaluations, and internalized sentences, they would find it quite possible to work calmly and concertedly at changing them.
~Albert Ellis
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mndfreeze
Shroomery Secret Service
Registered: 09/04/04
Posts: 4,487
Loc: PuppetMasterFlash
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Re: credit card question [Re: S_2]
#8345761 - 04/30/08 12:07 PM (5 months, 8 days ago) |
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If possible its best to pay off most of the card but not the ENTIRE thing. Leave a small amount on it (say 50 bucks) and pay it down then recharge it once a month to show use. This is the quickest way to raise your score. Its so much about how much money you put on it as it is how long you keep a rotating balance thats low.
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 Xeluc
Registered: 04/11/07
Posts: 567
Loc: OhHellOh
Last seen: 18 days, 1 hour
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Re: credit card question [Re: mndfreeze]
#8348991 - 05/01/08 10:01 AM (5 months, 7 days ago) |
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keep it at 10% utilization. Heard that's best. Don't close it, that's counter productive. You're gonna need credit again someday after all.
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badchad
Stranger
Registered: 03/02/05
Posts: 2,635
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Re: credit card question [Re: Xeluc]
#8349124 - 05/01/08 11:04 AM (5 months, 7 days ago) |
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IMO I'd just pay it off. Why pay interest if you don't have to?
You don't necessarily need to carry a balance to build credit. You can do it by paying things off on time, even paying them off in full.
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Veritas
Registered: 04/15/05
Posts: 9,772
Loc: PNW
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Re: credit card question [Re: badchad]
#8349216 - 05/01/08 11:31 AM (5 months, 7 days ago) |
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Yes, the advice to carry a balance on your cards is based upon the old credit scoring rules. Now you are scored on your credit-to-debt ratio and payment history, but NOT on carrying a balance each month. As long as you have recent activity on an account, the positive history will be "refreshed" in the scoring system.
For more:
http://www.myfico.com/CreditEducation/
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If people stopped looking on their emotions as ethereal, almost inhuman processes, and realistically viewed them as being largely composed of perceptions, thoughts, evaluations, and internalized sentences, they would find it quite possible to work calmly and concertedly at changing them.
~Albert Ellis
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Xeluc
Registered: 04/11/07
Posts: 567
Loc: OhHellOh
Last seen: 18 days, 1 hour
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Re: credit card question [Re: Veritas]
#8349253 - 05/01/08 11:41 AM (5 months, 7 days ago) |
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Thanks for clearing that up.
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geokills
······· º¿°·······
Registered: 05/08/01
Posts: 13,287
Loc: city of angels
Last seen: 4 hours, 39 minutes
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 Re: credit card question [Re: Veritas]
#8349528 - 05/01/08 12:37 PM (5 months, 7 days ago) |
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I thought so! 'Cause I got some bangin' credit and I'm always paying off my bills in full. The only time I've ever carried a balance is when I forgot to pay, and it's been many years (if not a decade) since that's happened. Thank god for electronic payment reminders! 
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