Why not close my unsued credit cards?

[stella7]

One of the reason why people have alot of debt is because of too much using of credit cards.But its said if you want to ensure the maximum points out credit score,one doesnt have to close their un used credit cards.Its bad to use money you dont have.

[Melizzy]

Cut the card up, but don't cancel. Your credit score is also determined by the amount of available credit you have. I'd say make a small charge once every six months and pay it off the next month. keeps the card active, establishes some sort of credit history and that helps you in the long run.

[Calypso]

Melizzy is right. Part of your credit score does take into account how much credit has been extended to you.

But this is a double-edged sword. If it looks like you have too much credit compared to your income, this can negatively affect your credit rating.

It's all sort of a difficult balancing act. When in doubt, consult a professional financial planner.

[SageMother]

I heard that in some cases that can work against you. Some mortgage companies use available credit against you as potential debt. Has anyone heard of this?

[mamab]

I'm not a financial planner, but my feeling is, if you're NOT using a credit card, and have no plans to do so, why leave it open? What happens if someone steals your identity and finds that you have three credit cards with 0 balance and they're still open? Don't you think they're going to start charging on those cards? Why give them the opportunity. It's much safer to shred the card and close the account.

[nangel78]

I put my credit cards away. I only use them on occasion and then pay off what I put on them.

[moonmagick]

Your unused credit cards can be used against you too. It depends on how much open credit you have available to you. This is all taken into consideration when creditors for things like home loans and car loans look at your debt to income ratio. Because even if there is no balance on that card right now, you could go out an max it out any day.

[katharina]

Quote:

Originally Posted by moonmagick

Your unused credit cards can be used against you too. It depends on how much open credit you have available to you. This is all taken into consideration when creditors for things like home loans and car loans look at your debt to income ratio. Because even if there is no balance on that card right now, you could go out an max it out any day.

Yes, this is right. When I paid all the credit companies off, I shredded the cards (except for one for emergency purposes) and called to cancel. I didn't want to worry about identity theft and our credit score was fine.

[Melizzy]

Shred the card and close the account? If you aren't using the card and don't have a card, just where are they going to get your info? I have a friend who works in the credit dept. of a new car place. Leaving the account open is good because they also look at length of credit history. And they could see YOU closing it as a sign the YOU don't trust yourself with credit.