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Moderator Emeritus
Posts: 4,469
Registered: ‎12-31-2008
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Re: balance on one card or spread across several to keep UTL under 10%

Totally your call, of course.

 

Several folks on here close down high fee cards once they have done their rebuilding work.  If you come to a point where you consider closing the FP rather than continuing to pay the fees, here's a helpful thread on Closing Credit Cards

Just puttin' syrup on something, don't make it pancakes.
Frequent Contributor
Posts: 290
Registered: ‎08-29-2011
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Re: balance on one card or spread across several to keep UTL under 10%

I think I am going to find out when the annual fee starts over and close it the month before. That way I can continue to collect some good points and since I am not paying any interest anymore its a win Smiley Happy   At least they stopped charging $7 to make an online payment. That was just bloody GREEDY

Senior Contributor
Posts: 3,889
Registered: ‎05-24-2011
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Re: balance on one card or spread across several to keep UTL under 10%

Wow you must have a great FP card.  I couldn't get a CLI to save my life even though I've paid on time since 2007.

 

I too worry about losing my cards for inactivity.

 

When I started trying to get my scores up in May, I had 4 revolving accounts.  I got my score as high as 635 and that was still leaving two with balances, though mind you they were much smaller than when I started.  When I finally got all 4 accounts to hit, leaving 3 w/ zero balances and one with a $25 dollar balance, I didn't get any more points than when I had the two reporting a balance.  FYI.

 

Congrats on paying off everything!  That's so nice come bill paying time to not have to send them any money at all.  My bill spreadsheet is MUCH shorter than it used to be. 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
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Valued Contributor
Posts: 1,126
Registered: ‎03-25-2008
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Re: balance on one card or spread across several to keep UTL under 10%

You can always rotate which cards you let report a balance (this is trickier if you are carrying balances and not paying in full). That way your cards will no close due to inactivity and one one will report (hopefully with a low balance). Also you can use all the cards you want and simply pay in full before the monthly statement date  for all but one card and the cards should report with a 0 balance.

New Member
Posts: 3
Registered: ‎09-01-2011
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Re: balance on one card or spread across several to keep UTL under 10%

DO NOT CLOSE the account. closing the account will ding your credit score. when you close an account it decreases your available credit. the best advice I was offered regarding this issue is to use it once a month. For example paying membership dues(gym,netflix).

New Member
Posts: 4
Registered: ‎03-24-2010
0

Re: balance on one card or spread across several to keep UTL under 10%

In general, it is much better to KEEP all the cards you already have, because LENGTH of credit and longer credit histories on your separate accounts is definitley part of the FICO pie/scoring system.

 

Get them all paid down, use them each at least twice a year, and immediately pay them off in full - and DON"T close them!

 

And, keep one major card, VISA MC AmEX or Disc, and use that for everyday day stuff, never going over 10% utilization and always paying it off in full so that your balance reports as zero.

 

Congratulations!  It sound slike you're making some really good moves!

New Visitor
Posts: 2
Registered: ‎09-02-2011
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Re: balance on one card or spread across several to keep UTL under 10%

You will almost always hurt your FICO scores by closing an existing account, because you are lowering your total available credit and probably lowering the average age of your open accounts (although not if the closed account hasn't been open very long).  If you have too many accounts, it may help years from now if you close some of the newest accounts with the smallest credit lines, but it generally takes 10 years for those accounts to drop off your credit reports entirely.  In terms of maintaining a balance on your revolving accounts, it is always best to have a zero balance on as many accounts as possible and a minimal balance on the one card you use regularly.  Keep in mind, your credit score is a snapshot, based on your outstanding balance(s) from your most recent statements only.  So, it makes no difference what your balance(s) were 3 or 4 months ago, only right NOW -- or, more importantly, right before you apply for any new credit and they pull your report!  If you want to avoid having your accounts closed due to inactivity, just use each of them once or twice a year, and you should be fine.

Moderator
Posts: 17,409
Registered: ‎07-14-2009
0

Re: balance on one card or spread across several to keep UTL under 10%


aggie404 wrote:

DO NOT CLOSE the account. closing the account will ding your credit score. when you close an account it decreases your available credit. the best advice I was offered regarding this issue is to use it once a month. For example paying membership dues(gym,netflix).


Hi aggie404 and welcome to myFICO.

 

While it's true that closing an account will decrease your overall credit limits this doesn't automatically hurt your score. As long as you have no other revolving balances then the act of closing will not hurt because your utilization will not increase. Here is a thread talking about Closing Credit Cards

.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Moderator
Posts: 17,409
Registered: ‎07-14-2009
0

Re: balance on one card or spread across several to keep UTL under 10%


Ex-MortgageBroker wrote:

You will almost always hurt your FICO scores by closing an existing account, because you are lowering your total available credit and probably lowering the average age of your open accounts (although not if the closed account hasn't been open very long).  If you have too many accounts, it may help years from now if you close some of the newest accounts with the smallest credit lines, but it generally takes 10 years for those accounts to drop off your credit reports entirely.  In terms of maintaining a balance on your revolving accounts, it is always best to have a zero balance on as many accounts as possible and a minimal balance on the one card you use regularly.  Keep in mind, your credit score is a snapshot, based on your outstanding balance(s) from your most recent statements only.  So, it makes no difference what your balance(s) were 3 or 4 months ago, only right NOW -- or, more importantly, right before you apply for any new credit and they pull your report!  If you want to avoid having your accounts closed due to inactivity, just use each of them once or twice a year, and you should be fine.



Hi Ex-MortgageBroker.

 

Lowering your available credit doesn't always hurt your score. You can see the explanation why in my post before this one. Also closing an account will not do anything to your AAoA or credit length history. Both of these will continue to factor into scoring for usually 10 years after closing. I invite you to also read this Closing Credit Cards thread.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

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