cancel
Showing results for 
Search instead for 
Did you mean: 

Close Account without paying card off?

tag
Anonymous
Not applicable

Close Account without paying card off?

Does it affect my credit score, if I close a high interest credit card account without paying it off?

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Close Account without paying card off?

My understanding is that the outstanding balance will count against your utilization, but the (former) credit line will no longer be counted in your available credit. So, your utilization will go up.

 

Are you considering closing to prevent a ratejack?

Message 2 of 6
oracles
Valued Contributor

Re: Close Account without paying card off?

Hi Carm and welcome to the forums.

 

This will indeed hurt your score tremendously.

 

Not only have you reduce you total credit but also increased your util%.

 

ie you have 30k in total credit, you have a card with 5k limit and 4.5k balance

 

you also have 10.5k of balances on other cards

 

In this scenario your util% is 50% 15k balance divide by 30k limit = 50% util

 

Now you close the 5k card, you now have 15k balances divide by 25k limit = 60% util

 

Don't do it, pay off the card ASAP or try to balance transfer it off to another card if you can.

 

CCC are making it difficult for us already with slashing limits, don't also do it to yourself.

Message Edited by oracles on 01-30-2009 11:48 AM
Message 3 of 6
Anonymous
Not applicable

Re: Close Account without paying card off?

Yes, my interest rate is going up by 6%. 
Message 4 of 6
oracles
Valued Contributor

Re: Close Account without paying card off?

Who is the credit card company?

 

You should call up and try to get it reduced, however because of the high utilization on it, they may not do it.

 

If it is Citibank, many have called to reduce their apr and have been successful.

 

Use the backdoor number posted in a thread sticky at the top of this forum.

 

call and try to get your apr reduced.

Message 5 of 6
Anonymous
Not applicable

Re: Close Account without paying card off?

I have a high util% with Citi and just got my APR reduced with the frontline CSR. It all depends on with whom you speak.
Message 6 of 6
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.