Confused

[Anonymous]

They say not to close your cards pay them off then cut them up.so say we do that doesn't the card company close your card on you.because now they are cut up you don't have access to use them. So what's the difference if we close it or the card company does. Either way it affects my scores. So what do we do.?

[Kree]

Closed accounts stay on your record for many years, but eventually fall off. The longer you keep the accounts open before they are closed, the longer they will stay on your record. Some companies might keep your card open for years before closing the account.

Additionally "cut them up" is not always meant literally, although I guess it is sometimes. You can use the card once every 3 months to buy a stick of gum, and keep the account open for forever.

[iheartwings]

---

@Kree wrote:

Closed accounts stay on your record for many years, but eventually fall off. The longer you keep the accounts open before they are closed, the longer they will stay on your record. Some companies might keep your card open for years before closing the account.

Additionally "cut them up" is not always meant literally, although I guess it is sometimes. You can use the card once every 3 months to buy a stick of gum, and keep the account open for forever.

---

Welcome Jovigirl429 -

I echo Kree's sentiment.

The main lesson here is that once you pay off your cards, your utilization drops. Low utilization can help your credit score (this is a Goldilocks thing - you don't want utilization too high - overall >30%, or >8.99% on any single card, and you don't want it too low, i.e., 0% utilization on all cards). The point about cutting up your cards is that you don't want to carry a balance once you pay them off.

Card accounts in good standing report and remain on your credit file for 10 years, so that contributes to your Average Age of Accounts (AAOA). Longer AAoA contributes to your credit score. The problem with closing a credit account is that your Total Available Credit (TAC, or TCL for total credit line) is reduced, resulting in higher utilization when balances are reported.

Depending on the issuer, you're right, your account could be closed for nonuse, so there is often talk on the forum to use your cards every few months for a small charge that you can pay off. 

There are several ways you can not use your card. Cutting them up is one example. Sticking them in a plastic bag with some water and freezing them is another. Many people refer to the SD, or the sock drawer, which can be literally, or figuratively meaning to set them aside somewhere and not use them. 

Hope that helps.

[Anonymous]

I have to go along with the other replies in that you can have some of your cards closed by the grantor for not being used.

But using it for a single purchase every now and then doesn't hurt at all. It'll keep them open and for some cards small purchases can result in CLI's as well.

I have a Chevron/Texaco card that I literally used 2 times that resulted in about $35 total. I paid it off and then asked for the increase and it went from $500 to $2500.

Helps out your utilization and also you get to keep the card open longer to help with your AAoA.

[NRB525]

---

@Anonymous wrote:
They say not to close your cards pay them off then cut them up.so say we do that doesn't the card company close your card on you.because now they are cut up you don't have access to use them. So what's the difference if we close it or the card company does. Either way it affects my scores. So what do we do.?

---

First, welcome. 

Second, who is “they”?  The choice to close a card you do not want, perhaps because of fees the card charges, is something you can do, you can close a credit card. That action alone, closing a card, whether initiated by you or the bank, does not affect your score. There may be utilization levels that can have an effect, but that is different from the closing. 

I would never recommend cutting up an open card. There are often reasons that you need the physical card. Put it in a sock drawer, don’t use it, or call the issuer to close it, but until you close it don’t cut it up. 

[Anonymous]

I think the "cut it up" advice is aimed at those who have got into crippling credit card debt and cannot trust themselves not to fall into the same position.   So this is during the "pay down debt" phase, where the concern is that if you kept it to buy gum every few months, you might also end up buying a whole lot more.   Getting a card closed is a much more minor concern that paying down the debt.

I guess as compared to closing the card yourself there is a chance that it will still be open when you emerge debt free.   

But again this is for extreme situations.   Better to either have it open and usuable, or close it in most cases.

[Anonymous]

I keep all my cards in a nice leather card portfolio in a drawer.  I put them all in there every day except for my emergency ATM card which is always in my wallet.

If I am going to go shopping today, I already know why I would go, where, and what I will spend.  I set a budget based on what I know I can pay off immediately if I need to.  I open my card portfolio, pull out the card that I know will earn me the most in rewards or perks or benefits, and leave with only what I need -- and a plan on the maximum I might spend.

After I use a card, I put a "usage" notation in a spreadsheet for today.  If a card hasn't been used in 85 days at all, I get a reminder that the card hasn't been used.  Typically if I haven't used a card in 6 months, it'll get closed -- there's always some tiny thing I do actually need that I can buy to keep a card active and not lose out on much cash back (1.5% versus 2% on a $3 purchase is equal to 1.5 cents I missed out on), but as my card portfolio grows, I definitely will close accounts that have no purpose.

The only account I refuse to close is a $1000 secured card that is my oldest by 5 years -- they will never unsecure, but they charge no fees and I do use the card 4x a year for a $9.99 quarterly deal from a local business I go to.  They have the card on file in fact, so I don't take it out of the drawer ever, but it gets minimal usage and I PIF right after it posts.

If you absolutely positively will never use a card, and it isn't your oldest card by a huge margin, then close it and shred it and move on from it.  Too much stress having to maintain unused accounts to make sure no new charges pop up out of the blue.  If your unused card is the oldest by many many years, you have to do your own math projections to see what will happen to your overall profile in 10 years when that closed account finally drops off.

I regret closing a secured card 9 years ago that I never used -- that card is going to drop off my profile next year and have a massive effect on the 2 credit reports it still shows up on.

[Adkins]

---

@Anonymous wrote:

I keep all my cards in a nice leather card portfolio in a drawer.  I put them all in there every day except for my emergency ATM card which is always in my wallet.

If I am going to go shopping today, I already know why I would go, where, and what I will spend.  I set a budget based on what I know I can pay off immediately if I need to.  I open my card portfolio, pull out the card that I know will earn me the most in rewards or perks or benefits, and leave with only what I need -- and a plan on the maximum I might spend.

After I use a card, I put a "usage" notation in a spreadsheet for today.  If a card hasn't been used in 85 days at all, I get a reminder that the card hasn't been used.  Typically if I haven't used a card in 6 months, it'll get closed -- there's always some tiny thing I do actually need that I can buy to keep a card active and not lose out on much cash back (1.5% versus 2% on a $3 purchase is equal to 1.5 cents I missed out on), but as my card portfolio grows, I definitely will close accounts that have no purpose.

The only account I refuse to close is a $1000 secured card that is my oldest by 5 years -- they will never unsecure, but they charge no fees and I do use the card 4x a year for a $9.99 quarterly deal from a local business I go to.  They have the card on file in fact, so I don't take it out of the drawer ever, but it gets minimal usage and I PIF right after it posts.

If you absolutely positively will never use a card, and it isn't your oldest card by a huge margin, then close it and shred it and move on from it.  Too much stress having to maintain unused accounts to make sure no new charges pop up out of the blue.  If your unused card is the oldest by many many years, you have to do your own math projections to see what will happen to your overall profile in 10 years when that closed account finally drops off.

I regret closing a secured card 9 years ago that I never used -- that card is going to drop off my profile next year and have a massive effect on the 2 credit reports it still shows up on.

---

This, so much! After I wrecked my credit in my 20s, I closed my B of A card (which actually survived fine) and I'm really regretting do that now. That card gives me almost 20 years of history and it's due to fall off in May 2018. I'm dreading the score drop.