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Credit Card Numbers
Is it harmful (on your credit history) to carry or have several credit cards? Does canceling credit cards yourself have a negitive impact on your credit rating? What is the proper way to cancel credit cards and not get any negitive credit history?
Best Answer
379 points
dustbusterz answered one year ago …
i want to address this last answer from Ethan R . no , never just simply cut up your card. if you really want to eliminate this card, then it is best to send the card back to the company and ask them to close this account. if you cut the card up (so you cannot use it) and you do not cancel the card, then that open line of credit remains on your credits score,so when you apply for a bank loan(they will spot that you have this large open line of credit) and might be less inclined to offer you a loan based on the fact that they feel you can use this open line of credit in the future ,subjecting you to a massive amount of credit, that you might not be able to comfortably be able to repay.
banks as a whole are conservative, and they want to see that you do not have too much available credit ,so they can feel safe, that your loan can, and will be repaid.
pay down or pay off all your credit cards as soon as possible. then decide what cards you wish to continue holding ,keep them, and send the rest back with a note, to each company, to close that card (or line of credit) it will pay off much more than cutting up a card , which no bank knows has been cut up .to the bank its still an open line of credit .
Answers
631 points
Creezy answered one year ago …
It doesn't directly give you "bad" credit, but it could over extend your credit. So if you already have a credit line that's too high due to all the cards that you own, it might be difficult to secure a loan for something else.
It also leaves you vulnerable to missing a payment, which could also mess up your credit. You might be better off consolidating all of those cards under 1 card and only worry about paying that one each month.
381 points
SirCrashton answered one year ago …
When it comes to credit cards, credit bureaus look at the ratio of your debt vs. available credit. Having several credit cards with small balances relative to your available credit could actually be beneficial. Fot example, if you have two credit cards with each one having a $10K limit and a $5K balance on one and a $0 balance on the other, you're showing $5K owed vs. $20K available credit. If you cancel the card with the $0 balance the picture doesn't look as good: $5K of debt vs. $10K of available credit. The proper way to cancel a card without any negative feedback is to pay off, in full, any balance owed.
Additionally, if your credit history is good, it's often possible to get a better interest rate just by asking for it.
904 points
jillybeansisme answered one year ago …
Sir Crashton is giving good information to you. If you have quite a few credit cards, pay off and eliminate the store cards because those carry outrageously high interest rates and they won't negiotiate those rates. Keep your Visa, MC, Discover, etc., but carry only one with you -- that is the one that gives you points when you use it that you can redeem for cash, etc. PAY THAT CARD OFF EVERY MONTH. The rest of the cards should be put in the safe and you shouldn't need more than 3 total cards. The one for the monthly expenses that earn you points and you pay off monthly; one that offers you a permanent low interest rate until the balance is paid in full that you use for major purchases that you plan to pay off within a year (furniture, car, etc.), and the one that you have from a company different than the other long term one that you can transfer balances to if they offer an even lower permanent interest rate or if you have an emergency use (death in the family, fire, etc.)
If you cancel a card, you should do so in writing to the company, and destroy the card in a shredder.
Use credit wisely!
4085 points
EthanR answered one year ago …
Driver, here is another bit of information that I don't think was addressed. If you have a credit card for a long period of time and have been timely with your payments, that is a strong positive on your credit report. Cancelling a card like that actually hurts your FICO score. It would actually be better to just pay off any balance, then cut up the card and not use it anymore. I do not agree with the answer above that a 5k balance with a 10k limit will help you, as I think the ratio of debt to debt limit is still too high. You are better off paying it off. Now, having said all of this, if your score is like 800, go ahead and cancel one card per year if you want. It's not going to lower your score to any degree that will hurt you. But if your score is 600, I would not cancel any cards, just bring down what you owe on each.
For more information, you can go to www.myfico.com
