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New Visitor
Posts: 2
Registered: ‎09-10-2012
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paying off closed account. Now or monthly?

I currently have a closed cc account and pay 2x the minimum on time each month.The balance is approx. $700. Would it help me to pay it off or continue to pay regularly, as the cc card company report to the credit agencies.

Frequent Contributor
Posts: 399
Registered: ‎04-30-2008
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Re: paying off closed account. Now or monthly?

That would be depended on the interest rate.

 

If you have the funds, I would suggest you pay it off.

Contributor
Posts: 150
Registered: ‎08-24-2012
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Re: paying off closed account. Now or monthly?

Paying it off would be better if you have the money. Unless your taking the money that would otherwise go towards something with an even higher interest rate, its probably your best bet.

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Posts: 13,869
Registered: ‎04-15-2011
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Re: paying off closed account. Now or monthly?

+1  If you can pay it off, get it done.



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Posts: 420
Registered: ‎09-08-2010
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Re: paying off closed account. Now or monthly?

pay it off completely if you have the funds.  No need paying interest if you don't have to.

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Senior Contributor
Posts: 3,067
Registered: ‎11-02-2009
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Re: paying off closed account. Now or monthly?

Only caveat to this is to consider how it will affect your utilization.  If you have a $700 balance on a closed account and that account has a high CL, it could be having a favorable effect on your utilization.  Once it is paid off, it no longer factors into your utilization.  So depending on what you have going on with your other accounts, you could see a score decrease once you pay it off.  For example, let's say you only have two cards, one open and the one closed.  If your balance on the open account is $600 with a $1K CL, and your balance on the closed account is $700 with a $15,000 CL, right now you have total utilization of about 8%.  But after you pay that closed account off, your utilization would jump to 60%. 

 

Of course, you eventually have to pay it off and you don't want to be paying high interest.  But if you have another credit app coming up, or say a mortgage in progress and you are right around a specific score that you need, you might want to wait before paying it the rest of the way off.


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