madchen779
Joined: 01 Mar 2007
madchen779's page
Posts: 2
117 Magic Points
|
|
Subject: Pay off and close? Or pay off and keep open?
|
|
|
Tue Apr 03, 2007 12:51 am
|
|
|
I am getting a pretty big tax return check this year and I want to pay off my credit cards. I have 3 credit cards, and 2 store credit cards. I am planning on paying off the credit cards (Visa/MC) and paying down the store credit cards.
I've heard it's better to completely pay off your balance and leave the card open. I've also heard it's better to pay down to about 1/3 of the balance and then keep paying on it.
I'd prefer to just pay them off. Do I have to close the cards? I have heard split opinions as to whether I should close the cards, or leave them open.
What should I do?? |
|
stanley
Moderator
Joined: 23 Feb 2007
stanley's page
Posts: 54
3357 Magic Points
|
|
|
|
|
Wed Apr 04, 2007 10:57 am
|
|
|
I am glad to see that you are taking care of your debts, I really appreciate the way you allotted you tax returns!
You haven’t mentioned the present status of your card accounts. It is not bad to maintain manageable balance on your credit cards. But if they payments are due, I would pay them off completely.
I have also got mixed feedback about keeping accounts open or get them closed. If you keep your paid accounts open, there is no problem, but the risk of fraudulent activity stays live and may create trouble for you later on.
On the other hand, by closing your open account you reduce your total available balance and that may hurt your credit score because credit scoring formula considers the ratio of your total debt to available credit.
IMO, you may close the account that you would never use in future but not all in a hit, do it slowly.
_________________
Stan
BTW, I am not a lawyer, I am here to share what Life has taught me. |
|
