Closing a card with a balance on the intention of paying it while it's closed

[Np1791]

So I'm thinking of closing Blispay as I don't need all the cards that I currently own and just last night one of my cards inquired an unauthorized charge that I already reported. So instead of having cards opened that I don't often use and risk fraud I would rather close them. Blispay being one of the cards that I don't use since now American Express does the same special finance on purchases over 99 at even longer periods than just 6 months, I would like to just close it. It has a limit of 4K and a balance of 500 that is on 0% till next june, I would like to know what the forums take is on closing a card with a balance and if there are any negative effects on my credit. I can pay the balance off within 2/3 months. Any responses are appreciated greatly. Thank you.

[Anonymous]

If you have a low debt-to-credit line ratio it will not really hurt you. If you have anywhere near or over 30% utilization currently, losing the available credit line of another account will indeed impact your score. 

I think most would agree that you should just keep it opened until its paid off; just one less thing to worry about. The only time I would recommend someone close an account with a balance is if closing the account is the only way to prevent a change in terms that you do not agree with (such as an increased APR-and not just .25% increase but say going from 11.9% to 20%).

[Adkins]

I would pay it to zero before closing it, for all the reasons listed above. 

[Anonymous]

I'm not sure how FICO Score 8 handles it, but prior versions of FICO scoring actually let you close accounts with a balance and it would continue to utilize the old credit limit to determine aggregate utilization as well as any penalties for individual utilization -- once a closed account reaches a $0 balance, only then did (older versions of) FICO scoring remove the credit limit from your aggregate limits.

I am under the impression that FICO Score 8 also handles it this way.   If it does, it means you won't be hurt any more (or less) than leaving the account open.

[Np1791]

After closing the cards with balances I would have a 27.65% utilization. Then after some payments that will drop to 24% on the 20th. Then I also have a bonus waiting. The utilization is not counting the credit limits of the closed accounts but just the debt. I would be closing 12,300 in credit overall.

[Np1791]

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@Anonymous wrote:

I'm not sure how FICO Score 8 handles it, but prior versions of FICO scoring actually let you close accounts with a balance and it would continue to utilize the old credit limit to determine aggregate utilization as well as any penalties for individual utilization -- once a closed account reaches a $0 balance, only then did (older versions of) FICO scoring remove the credit limit from your aggregate limits.

I am under the impression that FICO Score 8 also handles it this way.   If it does, it means you won't be hurt any more (or less) than leaving the account open.

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If this is true then I will definitely close my cards now!

[tcbofade]

If you close it with a balance, won't you lose the zero percent interest deal?

If it were me, I'd pay it off FIRST, then close.

[Anonymous]

If you're worried about security you could freeze the cards in question.