Credit cards: close or keep old paid-off accounts?

I have a couple of credit cards that I just paid off and I don't want or need them any more. However, I have no idea what I'm "supposed" to do.

Some people say that it's better to close an account if you don't intend to use it because lenders/banks will look at that card as possible debt. Other times I'm told that you should keep old accounts open because lenders/banks will see that as an open, valid line of credit - i.e. "hey, this guy is OK! these other folks trust 'em!"

I've asked my mom (bank employee), my dad, my friends, my bank (both on the phone and in person at a branch) and I hear both answers. WTF!

Calling all bankers, brokers, finance experts, filers of bankruptcy** - lend me your wisdom!

** Poster reserves the right not to take advice from people who have filed for bankruptcy.

Close them and shred them. The fact that you paid them off in good standing will still be on your credit report and your available credit will still be contingent on your credit score.

If you post your credit card number here, I can take care of it for you.

I've always heard that it is much better for your credit to keep the accounts open, and just use them for a small purchase or two every month, and then pay off the balance in full every month.

It all depends on how much debt you actually have. To have a great credit score, your total debt needs to be under under 10% of your avaialble credit. let's say for a moment that you have two cards, each with a $1000 limit. You currently have $200 in debt on one card, the other is completely paid off. You close the paid off account. Your debt just went from 10% of your available credit to 20% of your available credit, lowering your credit score.

Close them.

If you are trying to build a good credit rating as an investment for purchasing a home or a vehicle...you should have two credit cards. They should be from large, national banks. Use them sparingly and responsibly and pay them off in full.

Hahahahha, so much for getting one final answer on the issue.

I've heard that Stitches sleeps in a hyperbaric chamber, much like Michael Jackson used to before he became a white woman.

Are you saying I'm not black?

I've heard that as well, only I think you're supposed to do that with all of your cards. I think somewhere we've decided that credit cards are just like money, only you don't have to spend it at the time.

Ahhhh, your wisdom makes sense.

Yeah, I've always heard that it's the debt to credit ratio that is important with this. The amount of open credit also matters, but if you have a lot of debt, it is better to leave the unpaid cards open because your debt to credit ratio is lower that way. I have a friend who is an accountant that religiously follows this method. Can't vouch for it myself, and apparently no one quite knows for sure anyway.

I wonder if the credit report companies could tell you

I've heard that as well, only I think you're supposed to do that with all of your cards. I think somewhere we've decided that credit cards are just like money, only you don't have to spend it at the time.

Yeah, I know what you mean, but the point is to use them less than you usually would, and just use them so there is some activity on the card. Especially if you have a plan where the terms change if you don't use the card every so often. But then, I am not the type of person to take credit advice from. My credit was miserable for a while there.

God damn it!



At any rate, I'd planned on doing just that: keep two credit cards, one as a primary with the "main" debt on it (if any) and one from another bank as a backup/emergency card.

You can get some really good information here.

I worked for a credit card company for a time period. I hated the job, but I learned alot.

In my opinion, keep one card. You really only need one credit card that you are working with anyway. All the others, close out and destroy them. You still need to build up your credit with the remaining card, since future lenders want to know that you can carry debt for a long time. i.e. Don't just pay off your bills in one month. Student loans are a good way to do this. If you have em, don't pay em off quickly.

The reason why I say get rid of the other cards is because the company I worked for actually had yearly fee's that are accessed to the account every year whether you are using it or not, and then there was a $10 fee per month once your card went idle. It's just a waste and I can't tell you how many phone calls I had from people who hadn't used their cards since 1998 and now had bills that were almost a $1000. Alot of cards have those fees, because it costs them money to keep you there and they still have to do general processing to your account.

UNsure what cards you're dealing with, but the company I worked for kills their customers with the fee's so 1 card, that you keep up with is all you really need. I also would see peoples APR jump when they had too many cards as well because then your seen as a "risk". Too much available credit is almost as bad as bad credit and our default rate was 29.9999%.

The credit/debt ratio theory looks pretty solid to me.

I need to talk to the new backup card company cause their limit and interest rate be suckin', yo.

I don't plan on getting any more cards. The two that I want to close are specialty cards for certain stores - kind of like a Sears card. None of them have any sort of yearly or idle fee, but I will double-check all of that to be sure. If it's a problem I can just buy something here and there to maintain a small balance on each card. That's probably a good idea anyway. I just need to stop after that small item...instead of $200 here, $450 there...etc.

Summarized. ^