Comments on: Closing Credit Cards Hurts Credit Scores – Episode #78 http://www.videocreditscore.com/closing-credit-cards-hurts-credit-scores/ Tue, 24 Jan 2012 18:29:53 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: VideoCreditScore-Andy http://www.videocreditscore.com/closing-credit-cards-hurts-credit-scores/#comment-469 VideoCreditScore-Andy Fri, 13 Feb 2009 20:51:54 +0000 http://www.videocreditscore.com/?p=829#comment-469 Great question. Credit card companies are raising their APRs and probably doing so in a very broad way. I'm betting that one of the metrics they are looking at is overall average apr. Now, the Fed posts this rate around 13.38% and I'm sure the credit issuers are trying to raise the average rate as they will equate this with higher profitability. Higher average APRs will mean a higher average profit. There are too many stories of people having rates raised for no reason. You are additionally right that cards are being canceled for lack of use. Here's the winning strategy: Keep your card open, use it once a year and make a payment immediately. This way you keep your card from being closed [my card closure notice said I hadn't used it in a year as a reason]. You don't want to close the card as your <a href="http://www.videocreditscore.com/credit-utilization-ratios-explained/" rel="nofollow">credit card utilization ratio</a> will take a hit. You also want to try to keep your card utilization around 10% for the best score possible. It's worthwhile to set up your <a href="http://www.videocreditscore.com/closing-date-and-due-dates-can-impact-your-credit-score/" rel="nofollow">closing dates and due dates</a> and start a habit of paying off your cards 2x per month. Great question. Credit card companies are raising their APRs and probably doing so in a very broad way. I’m betting that one of the metrics they are looking at is overall average apr. Now, the Fed posts this rate around 13.38% and I’m sure the credit issuers are trying to raise the average rate as they will equate this with higher profitability. Higher average APRs will mean a higher average profit. There are too many stories of people having rates raised for no reason.

You are additionally right that cards are being canceled for lack of use.

Here’s the winning strategy: Keep your card open, use it once a year and make a payment immediately. This way you keep your card from being closed [my card closure notice said I hadn't used it in a year as a reason]. You don’t want to close the card as your credit card utilization ratio will take a hit. You also want to try to keep your card utilization around 10% for the best score possible. It’s worthwhile to set up your closing dates and due dates and start a habit of paying off your cards 2x per month.

]]> By: Anon http://www.videocreditscore.com/closing-credit-cards-hurts-credit-scores/#comment-468 Anon Fri, 13 Feb 2009 16:49:08 +0000 http://www.videocreditscore.com/?p=829#comment-468 Love your web site. I have a question that I can't seem to find an answer to anywhere..only consumer's opinions. I recently got notice that my Capitol One card APR went WAY up. This is a car we don't typically use anyway so don't have a balance on it. This has really angered us and our first reaction was to cancel the card. So, my question is, is it better to cancel the account (before they would spontaneously cancel us for no apparent reasons, which I read is happening too) or just put the card away and not use it, but keep the account. Which is better for our credit score. Currently we have a stellar credit score. Thanks so much for your help. Love your web site. I have a question that I can’t seem to find an
answer to anywhere..only consumer’s opinions. I recently got notice
that my Capitol One card APR went WAY up. This is a car we don’t
typically use anyway so don’t have a balance on it. This has really
angered us and our first reaction was to cancel the card. So, my
question is, is it better to cancel the account (before they would
spontaneously cancel us for no apparent reasons, which I read is
happening too) or just put the card away and not use it, but keep the
account. Which is better for our credit score. Currently we have a
stellar credit score. Thanks so much for your help.

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