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Wanting to cancel all of our credit cards

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Anonymous
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Wanting to cancel all of our credit cards

Our credit score is slowly improving. It is now up to 661 as of 8 weeks ago. Within that time we have paid off a $10,000 balance on a loan. paid off my van $4,000 and a new car I had finaced for my daughter was wrecked(not her fault) was also paid off.

 

So here is were I dont know what to do. We have 3 credit cards all of them we have had for over 4 years. We have paid them on time every month and always more than the minimal balance. Each card carries a 3,000 balance app. but the interest rate is sky high on them 29%!! they slowly over the last 2 years just creeped up higher and higher.

 

I tried to do a credit card transfer to a lower APR with a few companies and have been denied each time..now we will have the money to pay them all off in a few months. I am so angry with the high APR i just want to pay them off and cancel all of them.

 

I am scared though this will hurt my FICO score..any suggestions?

 

 

Message 1 of 8
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Anonymous
Not applicable

Re: Wanting to cancel all of our credit cards

I guess if you know yourself well enough to know that once you pay them off, you will charge them up again and be in the same situation, that's one thing.  But closing them is an extreme approach.

 

If you close them, your util will be affected because your available credit will go way down.  Also, part of the credit game is having good history.  Once you close the accounts, you won't have any good history because you won't have any current history.  That makes the bad things look worse.

 

Do you have other trade lines reporting besides these credit cards?  If not, then the effect is even worse.

 

Yes pay them off.  And hey, maybe you don't need all of the available credit that you end up with once you pay them all off, so you could decrease your credit lines or close one of the cards.

 

Think closely about this before you do something rash just because you're upset.

Message 2 of 8
Anonymous
Not applicable

Re: Wanting to cancel all of our credit cards

We will have some credit history still rolling.. my husband's truck and our farm ATV. I am even thinking about just locking the cards up in the bank safe deposit box to hold off the impulse buying. OR canceling out 2 of them and only keeping the lowest APR which is still a sorry 24%.

 

It just makes me mad that we have never been late with the our payments and always paid more than the minimal and they still raised our APR anyway.

Message 3 of 8
Anonymous
Not applicable

Re: Wanting to cancel all of our credit cards

Once you pay them all off, it may be possible to get some new cards with the same credit limits but with better interest rates.  At that point, you could safely close the old accounts to punish those credit card companies for not playing nicely.

 

Revolving credit is weighed more heavily than installment credit. So if you can keep some revolving credit still building good history, that will help you.

 

You'd take a slight ding on the inquiry and on the new account, but may be worth it in the end to make your point.

Message Edited by jesslyn on 08-25-2009 01:43 PM
Message 4 of 8
Anonymous
Not applicable

Re: Wanting to cancel all of our credit cards

ty for the suggestion..I didnt know revolving credit was more important..so I will pay them off..wait for my score to improve..move to a low interest card if I am approved then close out the rip offs..sounds like a plan..

 

I just paid off my $10,000 loan & 2 cars last month.. i wonder how long it will be before it shows on my credit report.

Message 5 of 8
DI
Super Contributor

Re: Wanting to cancel all of our credit cards

 

Has Dave Ramsey brainwashed you?  Don't close your accounts.  If you have an account where you pay an annual fee, then that is an account  to consider closing.  But if you want to maintain a high credit score you want to keep the oldest account open. 

Message 6 of 8
LisaPA
Regular Contributor

Re: Wanting to cancel all of our credit cards


@Anonymous wrote:

Our credit score is slowly improving. It is now up to 661 as of 8 weeks ago. Within that time we have paid off a $10,000 balance on a loan. paid off my van $4,000 and a new car I had finaced for my daughter was wrecked(not her fault) was also paid off.

 

So here is were I dont know what to do. We have 3 credit cards all of them we have had for over 4 years. We have paid them on time every month and always more than the minimal balance. Each card carries a 3,000 balance app. but the interest rate is sky high on them 29%!! they slowly over the last 2 years just creeped up higher and higher.

 

I tried to do a credit card transfer to a lower APR with a few companies and have been denied each time..now we will have the money to pay them all off in a few months. I am so angry with the high APR i just want to pay them off and cancel all of them.

 

I am scared though this will hurt my FICO score..any suggestions?

 

 


Once you get them paid off, the interest rates don't matter any more. Yes, as a matter of principle, it's highway robbery to charge 24%. But if you don't carry a balance, that won't affect you at all. The best choice is definitely to improve your scores and get a new card with a better rate. Also, if your scores improve you may have a better chance at negotiating  a lower rate on your existing cards. 

 

You should also keep your oldest card open even if you close the others, to help your account age.

Message 7 of 8
Anonymous
Not applicable

Re: Wanting to cancel all of our credit cards

Ty... our oldest card is sears and they just jumped the interest rate to 27.15% they are giving us a chance to Opt Out.. so I guess I will keep them open and cancel out the newest card...I have a jewelry store credit card I never use should I close it or just leave it be?

 

So guess I will pay them off... store them in the safe and pull a Clark Howard.. just use them once a month or less and only charge $10 on each one just to keep them active and pay it in fuill every month.. heard it doesnt make the credit issuer very happy but it keeps the line open and your credit flowing..

Message 8 of 8
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