Close out old credit cards?

[irseg]

A little over a year ago I got my first credit card, with basically no credit. No annual fee, but it has no grace period and a 24% APR (yikes!!). Since then I got two other cards with far better rates, and I don't really use the original card anymore except for my monthly gym membership because I'm too lazy to call them and change the CC number.

I typically charge a few hundred for normal living expenses and pay it off every month, only carrying a balance for a few months if I use it to travel, etc.

So what I'm wondering is how having that card I don't really use or need anymore affects my credit score. On one hand it means I'm using a much smaller percentage of my available credit which is a plus, but it's also that much more debt I could accumulate if I decided to max 'em all out. Plus I've heard that having too many cards can hurt your score. So I could see it affecting me either way. Any input on how that works and how many CC's are safe to have?

[eribrav]

Get rid of it! That's one less thing to worry about if you have your wallet stolen or someone gets access to your confidential info.

Your credit score will be fine with 2 cards, and a good payment record.

[Force 10]

It's your first card, therefore, you have the most time accumulated with it. Keep it. Don't use it but keep it for your overall score. Since you have the most time on that card, if you've done good by it, it's your best scoring card. Cut that little bastard up but don't close it out. Or, you've proved yourself to the credit company so give them a call and play hard ball. Tell them you want a cheaper APR then the rest of your cards or going to shove it up their ass. Chances are they'll lower it to at least half of 24.

Don't close out the account, leverage it. You may not ever use it again but keep it open for your score.

[Averett]

Like Ruprex said, keep it because it does have a good effect on your credit score.

Yes, call them to lower the rate. Say youve got other offers for lower rates and they'll most likely lower the rate.

[eribrav]

Have to disagree with the other responses.

First off, why bother calling to argue about the rate when you never use the card? The interest rate could be 2%, it could be 200%; if you don't use the card it really doesn't matter.

Secondly, keeping the account open and doing nothing with it isn't doing all that much for your credit score. If you use the other 2 and pay your bills, your score will be fine. There is downside to leaving it open though. Let's say you end up needing another specialty type of card. Then you're starting to get quite a bit of cumulative open credit. The worst problem of all though, is that cutting the card up but leaving the account open is a big setup for forgetting about it completely and having it come bite you in the ass sometime down the road.

To sum up, stop making economic decisions based on what you think other people or entities would want you to do. Make the best decision for yourself.

[ericbenjamin]

DO NOT CLOSE THE CARD.

Closing the card will lower your available credit amount which in turn raises your utilization and lowers your score!

A good place to learn about credit cards Be sure tovisit the forums!!!


eric

[gonadman]

If you intend to apply for any loans in the near future(car, house) it is better to close it. I believe the more credit available to you will lower the amount of loan money you will qualify for.

In simple terms, a guy with the ability to run up a total of $20,000 in credit card debt is a much higher risk than a guy with the ability to run up only a $5000 debt, given the same income and expenses.