Question : How and why is my credit card affected when I open and close a credit card?
I see a great deal at a store to open up a credit card and get a prize or a rebate. If I want the big discount I open the credit card and then get the discount but I don't want or need the credit card at all.Is it better to close down this new card or keep it open with a zero balance? How does opening and closing account affect my credit score?
- asked by Double Negative
All Answers:
Answer #1
Your credit score is based on history. If youopen an account, your score will temporarily godown. It will eventually recover fromthat.Closing an account is a slightly differentmatter. Depending on how much total credit youhave (add up the limits on all of your accounts),closing an account can cause your score to go downif it significantly reduces your total credit. From that standpoint, leaving the card active witha zero balance would help your score. Howeverhaving an account open can create another avenuefor potential fraud. I, personally, closeaccounts I don't use for that reason. Many cardcompanies will also close an account automaticallyafter a period of inactivity; 3 years iscommon.There are a lot of things that can makeyour score vary a few points. Honestly, don'tworry about your score that much. Use creditresponsibly, NEVER be late on a payment and pay itoff every month. Your score will take care ofitself.
- answered by R T
Answer #2
Too much available credit is bad because it pegsyou as a risk because you could all of a sudden goon a manic spree and charge up a bunch of debt.Not having enough established cards with strongpayment historys and lengthy relationships is badbecause it shows you fly by the seat of your pantsand are unstable. Opening a card is a hard hit onyour score and takes points. Keeping a card openwith a zero balance seems like you don't trustyourself to make faithful payments, and will beclosed eventually by the issuer for inactivity. Toassist in payment history, I always advise justusing your card for what you'd normally pay infull anyway. Like gas or utility bills, and thenwhen you get your statement pay of all but 10dollars, you won't be charged much intrest and itshows you can responsibly carry a revolvingbalance. Paying in full each month does no good,as it shows that you don't responsibly manage arevolving balance, that's not to say it doesn'thelp your payment history, it does help with that.Also, as an FYI, creditors don't like those that*float* from 0% (or another low promotion) on onecard to another. They become pegged as ratefloaters, and low promotion offers will become fewand far between.
- answered by Maltese Mamma
Answer #3
PLEASE do not ever ever ever get a retail creditcard. They charge the highest fees and have thehighest interest rates. Think of credit as provingyourself. The more history of good payments overtime the better. Credit shows how responsible youare.BTW, I own my own credit repair company. Ifanyone viewing this post needs credit repair,please visit my site below.
- answered by chris c
| 
