Credit Cards

[woopah]

I'm not sure if this is the right place to post this, but I'm sure a mod will move it.

I have a line of credit with GE Money. It is not a home equity line, just a regular line of credit. The interest rate is 11.99% and the amount is $5,500. I paid it off in February because I was told that I will never qualify for a lower interest rate, regardless of my history or what happens with my credit scores. And that I "must have misunderstood" when I applied and was told that I could ask about getting them lowered.

Should I close the line of credit? With my all my cards that are currently carrying balances, 4, on intro 0% interest, 11.99% interest is very high. Additionally I won't ever let myself get into this situation again, with CC debt, so I don't foresee needing to use it. I got it at the time because 11.99% was better than 29% on some of my CC's.

But I don't know what the rules are in regards to lines of credit. When I pulled my reports in April I wasn't told that having this was hurting my FICO score by itself. But I was told that I'd made heavy use of my available credit, 25%, and that I have a lot of accounts.

Which I do have a lot of CC's, but I also have multiple student loans listed, because they kept getting sold to different companies, and I refinanced my car after I got it, so the original car loan is on there along with the refinanced car loan.

So, should I or shouldn't I close the Line of Credit?

Message Edited by woopah on 07-17-2008 08:44 AM

Message Edited by woopah on 07-17-2008 08:47 AM

[Creditaddict]

I would keep it right now until you finish paying your credit cards off because if your at 25% now and you close 5000, that is going to send your util up (to what?) i don't know all your credit lines.

[woopah]

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Creditaddict wrote:

I would keep it right now until you finish paying your credit cards off because if your at 25% now and you close 5000, that is going to send your util up (to what?) i don't know all your credit lines.

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So that line of credit gets counted in my util?

I haven't been counting it and with my credit cards alone I have $86,600 in available credit and currently $13,723.73 is used. So that's currently at 15.8% util, CC's alone.

I know that won't show on any of my credit reports, since some of those payments are as recent as the 11th and the 15th, but that's what I've got according to my records.

[Creditaddict]

oh right, someone help, does that count in util?? i think i may be wrong!

I know I have a credit line and when applying with BofA they ignored it as debt because it was installment (thank god!)

[FretlessMayhem]

I agree with CreditAddict. Your LOC is paid off, and not costing you any money, so you should keep it open for util purposes.

FWIW 11.9 on a LOC is fairly low, IMO.

[smoothjk]

I agree with Fretless, leave it open unless it has an annual fee or something. Lower util % always helps.

Plus, 11.99% is a good rate. Just because your other cards are at a promotional (?) 0% right now doesn't mean you won't appreciate the 11.99% later.

[thrasher865]

11.99% is a good rate for a credit card.  For a HELOC it's terrible.  As for an unsecured line of credit, I don't really know.

Well, I looked around and 11.99% isn't bad for an unsecured line of credit.  Chase offers prime + 2.74% (10.49%) and other places offer as low as prime + 1% (8.75%).

Plus, it more than likely has an annual fee.

Message Edited by thrasher865 on 07-17-2008 11:42 AM

[cheddar]

A revolving LOC does count in utilization.

I agree that you should keep it open as long as it doesn't cost you anything.  (I've never heard of a LOC with an AF.)

[woopah]

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cheddar wrote:

A revolving LOC does count in utilization.

I agree that you should keep it open as long as it doesn't cost you anything. (I've never heard of a LOC with an AF.)

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Thank you everyone for all your responses!

Thanks, Cheddar for the definitive answer on util. Seems like I wasn't the only one who wasn't sure. I guess my overall util is a little better than I thought at 14.9%.

For those commenting on the interest rate. I do have a few cards that are under 11.99% interest. A $4500 CL Citi at 8.74%. I also have the exact same card with a $9,000 CL at 19.74% that I will one day call and ask for them to lower the APR. Insane that it's the exact same card with 11% higher interest. A Chase that's intro now but should be 9.99% after intro with a 13K CL, and another Chase with $4500 CL and an interest rate of 10.99%, which should continue to lower as my credit picture continues improving.

The other reason why I was commenting on the 11.99%, is because when I applied for the LOC I was told that the fixed rates were between 7.99 and 11.99. Clearly I was only approved for the 11.99, but it's insane that they'll never the lower the Interest, no matter how good my credit gets.

And there is no AF, so I'll keep it open.

Thanks again!

Message Edited by woopah on 07-17-2008 12:28 PM

[thrasher865]

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cheddar wrote:

A revolving LOC does count in utilization.

I agree that you should keep it open as long as it doesn't cost you anything.  (I've never heard of a LOC with an AF.)

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Huh, I thought most unsecured LOCs had annual fees.  I don't have any experience with them, I was just under that impression.

eta: I may have been thinking of origination fees instead of AFs

Message Edited by thrasher865 on 07-17-2008 12:59 PM