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Thread: JJ- Credit question

  1. Senior Member
    jessicawhit's Avatar
    jessicawhit is offline
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    Apr 2011

    JJ- Credit question

    I have a Care Credit account. Opened in October, and I will be paying off the balance as of Feb 1st because they had a promotion, if you paid off the balance within 6 months, you can get no interest fees! So I will have paid it off within the alloted time.

    Now my question is, do I keep it open.. with no balance.. and if I do that, will it hurt my credit? Someone said if I don't close it, that it will hurt my credit if I keep it at a 0 balance, and just as an "incase" option if my dogs get hurt. Or should I put SOMETHING on it monthly, and pay it off at the end of each month, or should I just cancel the card?

    I am trying to help my credit, so what is the best route to go here?

    ALSO- Same as my military star card. I have 200 bucks left on that and have had that, for over a year now.. and will be paying that 200 off in the next month or two. Cancel it, or keep it open?

    Thank you in advance, I REALLY appreciate your help!!
  2. Regular Member
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    As far as "helping your credit" goes, cancelling the cards is probably not a good idea. Part of the score reflects how long you've used credit --so when you cancel stuff you may have older accounts "fall off" your record which isn't if you're cancelling it's always best to cancel newer accounts. The other negative is in regard to another major component to your score--"how much you owe." This is a calculation based on what you owe relative to what your line of credit is...lower is better. So, if your Care account has an available line of $1,000 and your Star card has a line of $1,000 (and you have nothing else), your utilization ratio would be $200 (star balance)/$2,000 or 10%. That's actually pretty good, but if you cancel the Care card it would jump up to 20% (which is still ok, but the key is to understand the utilization ratio concept).

    From a credit score perspective, my thought would be to consider keeping them both open, periodically use and pay off at the end of the month (this would ensure they keep reporting your responsible use!).

    Here's a great primer on credit scoring.
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.
  3. Regular Member
    LifeHappens's Avatar
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    keep open

    To get the best advice, go talk with your bank....
    But generally, keep cards open and use every so often (charge $20) to keep it active and immediately pay it off.
    Credit bureaus like to see cards that have been open a long time and have a zero balance.
  4. Regular Member
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    Quote Originally Posted by Nabilhnqq View Post
    I paid off some old collections and they are still n my credit file. Why are they still there?
    Old thread is old, but in response to this, they will stay on your credit report for 7 years from when you made your first payment.

    For example, terrible human story time, an acquaintance of mine racked up about 300k in student debt and lived in China for 5 years, came back and found his credit score was low 400s because his loans were in collections and he couldn't do anything like get an apartment - he went back to China and spent another 5 years there. He never made a single payment for those years and when he came back, the collections had fallen off his credit report because it had been 7 years and his credit score is in 700s. He bragged about this on facebook last year. What an asshole. I hope some agency manages to collect one day.

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