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| *Ostroff, Fair and Company>>>Credit |
What happens when you cancel your credit card after activating it? |
So I have a billion credit cards, but i always pay them on-time, and i really wanted to get a gas card.. So i got the chase rewards gas card.. It's been about 2-3months since i had it. and i dont want it anymore b/c i saw that Discover has a better CashBack bonus... I also have cancelled about 2 credit cards... Is cancelling cards bad??? It's bad to cancel cards because it make your debt ratio go up. Let's say you had 3 credit cards with a $1000 limit on each and you owe a combined balance of $1500. That's a 50% debt ratio and it factors into your FICO score. Now should you cancel one of your accounts, you now have 2 open accounts owing $1500 and your ratio is 75%; this will affect your credit score. Even worse than that, you said you applied for 2 cards in the last month and are going to apply for another. This will really hurt your score due to inquiries and recently opened accounts. Source(s): http://www.freshstartmortgagehomes.com... No but not being able to keep at least one card for a long time is bad If you don't want the card at all anymore, make sure you call the card company and tell them that you want to close your account. If you just destroy your card without calling them, they will still think your card is open, and report it to the credit bureaus as an open account. 25+ years in banking/credit Cancelling cards works in your favour, shows you can manage them It definitely can. Credit is desgined to be used out out of need. You lose points when you apply for credit, regardless if you're approved or not, because of the inquiry to run your credit. Also, when you cancel cards you not only shortens the payment history, but also the combined available credit of all your cards, increasing your debt ratio making it seem like you owe more than you do. It's even worse if it's a card that you've had for a while becuase it shortens the average age of all your credit accounts, making it look like you've been establising credit more recently than you have. My advice would be to stop shopping for cards and take care of the ones you have now. |
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