what's bad in closing a credit card?

[tylalee]

so i closed one of my credit cards. They are charging me monthly fee on a car i will not use so i close it.

good move or bad move?

[blessed]

Technically bad but I would take a hit of a few points to close an account I didn't want.

When you close an account it zeros out the line of credit so that lowers the balance vs high balance ratio. If you have two credit lines open that total $100 and you close one card with a limit of $50 and still carry a balance of $45 on the other, now you're at 90% maxed out instead of 45%. Make sense?

[LSUTiger32]

Good move, close it and be done.

[Logan]

Technically bad but I would take a hit of a few points to close an account I didn't want.

When you close an account it zeros out the line of credit so that lowers the balance vs high balance ratio. If you have two credit lines open that total $100 and you close one card with a limit of $50 and still carry a balance of $45 on the other, now you're at 90% maxed out instead of 45%. Make sense?

You're assuming this person is carrying a balance. Also, it's not the balances that are the problem with our credit scores as much as it's the BK and bad credit history.

Also, it was a good move because they were paying an annual fee. Paying a credit card company an annual fee, late fee, interest or any other money is a bad thing.

Logan

[Logan]

so i closed one of my credit cards. They are charging me monthly fee on a car i will not use so i close it.

good move or bad move?

I did the same thing. 2.5 years out of BK and my score are now in the low 700's and I've closed a CC and had another company close one on me for lack of use.

Logan