Reply
Frequent Contributor
WhiteCollar
Posts: 309
Registered: ‎04-07-2012

Closing Accounts with a Balance

Is it frowned upon to close an account with a balance remaining? 

Established Contributor
calihlove75
Posts: 787
Registered: ‎05-16-2012

Re: Closing Accounts with a Balance

[ Edited ]

I don't think you can truly close an account with a balance besides closing it to further charges. I think as long as there is a balance, paying on or not, that it would affect utilization which could hurt your score but I am not 100% sure.


100% Ficos: EX 762, TU 767, EQ 754 Inquiries last 1 year/6 months: EX-0/0, TU- 0/0, EQ-2/1~ last credit card app 6/24/13- New car loan 3/8/2014
Discover IT $8000~Kohls $1000~Amex BCE $2000~ Walmart Discover $7500~NFCU Signature CashRewards $14,000~ Chase Freedom MC $6000~ Chase Amazon Visa $1900~ Cap 1/HSBC MC $2500~ Amazon Store $7000~ Fingerhut $1050
Moderator
Shogun
Posts: 12,884
Registered: ‎04-15-2011

Re: Closing Accounts with a Balance

+1  The account would have to be fully satisfied to be properly closed.

 


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Senior Contributor
youngandcreditwrthy
Posts: 6,154
Registered: ‎08-16-2012

Re: Closing Accounts with a Balance

WRONG guys... you can close it to prevent an APR decrease and continue paying it.. I've done  that with Neiman Marcus and Chase (twice with Chase actually). It just reflects closed on your report and of course... it will still report the balance until you PIF. It just prevents you from making any add'l charges to the account.

Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| Wmt Discover $12.5k | BR Visa $12.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Arrival $12.7k | Smile Gen $7.25k | Dillard's $5k| West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k
Senior Contributor
youngandcreditwrthy
Posts: 6,154
Registered: ‎08-16-2012

Re: Closing Accounts with a Balance

oh.. and it doesn't affect utilization... either for your credit limit or balance part of util. I know this bc I've calculated my personal util percentages (with and without the closed account), and the balance I still  owe on my old WAMU/Chase account never gets factor into my util, nor does the CL.

 

Now of course, on my recent approved recon with Chase.. they did ask why I still had a balance on an unpaid account haha, and my reason was that  the int rate was so low.. lol 9.24%, that I was not in a hurry to pay it haha.

Marriott PR$25k | BCE $24.5K |BankAmericard Visa $25k| Wmt Discover $12.5k | BR Visa $12.5k | Amex Delta Gold $10k | Discover IT $10k | Paypal Extras MC $15k | Amazon Store $10k|Arrival $12.7k | Smile Gen $7.25k | Dillard's $5k| West Elm $4k| Express $3.05K | Mypoints.com Visa $4.5k | Freedom Visa $1k| Amex Surpass $1k

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+