Will it hurt my credit to close rovolving accounts after the balance is paid off?
Or should I just leave them open (there is no annual fee)? The deal is that my husband bought a motorcycle by opening up a Suzuki credit card, we got the interest down to 6% from 17.9 (thank you soldier's and sailor's relief Act) and he has recently sold the bike. He bought a couple of other things like that too, but those were paid off last year. He doesn't need all these revolving accounts on his credit, so would it hurt it more for him to leave them on there and have no activity or just close them?
It's only 6% for the things he already charged, if he uses it again, it will go back to 17.9%, the limit on this account is 5800, but I don't want him trying to buy another bike!
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Tagged with: credit card • motorcycle • relief act • revolving accounts • soldier • suzuki
Filed under: suzuki motorcycles
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You never want to close an established line of credit. Not only will it erase credit history from your credit reports, it also messes up your debt/credit ratio used to calculate the FICO scores.
And is that 6% frozen? Or can you still charge stuff to the card at that rate! You crazy for canceling such a deal?????
Just keep the card, don’t use it. If you don’t think you can control your credit spending consider calling and having the credit limit dropped to $500 or so.
It helps your credit score if you have available credit that you are not using.
I read on a credit site to leave the available credit line open, just dont use it.
If you have 500 debt and 2000 credit then you’re only have 25% debt. But if you have 500 debt and 750 credit then…
Ideally, you want 3-5 open accounts on your report. You want to keep open the ones that are oldest and have the highest limits. If this card is not one you are really going to ever use again, I would just close it. It might make a temporary ding in your score, but if you don’t use it it will be closed eventually anyway. Better for you to have control over when that happens.
Also, store cards like this are not as good to have on the report as a mastercard, visa or amex.
and to add to the other answers the length of time that an account is open adds to your credit score and since another component is the percentage used of available credit the more lines at 0 or low utilization the better the score
so probably not a good idea to close the lines, just dont use them
It really depends; in a situation like this, it probably wouldn’t hurt you to close this Suzuki account, especially if you have no intention of purchasing another bike. It probably has a relatively large line associated with it.
That said, this isn’t always the case. One big factor in determining your credit score is the length of your longest credit relationship…I would recommend to new people starting out with credit t o have their first card be one they’ll keep (more likely a regular credit card, or perhaps a gas card, which can be easier to get at a young age…as opposed to a store card that many people use for the first day 10% off, and never use again).