Need financial advice from people, specifically about credit cards?
Posted in Credit on 08/30/2009 06:59 am by admin
armero asked:
I have several credit cards with high balances that require minimum payments of at least $20.00 and higher. Interest rates are at 20% and higher. I know that banks will bargain with a consumer to lower the interest rates significantly by closing the credit card for use. My question is, isn’t it true that if one closes a credit card, it will look bad on their credit report and have a negative effect? Thanks for the help.
ETHAN
I have several credit cards with high balances that require minimum payments of at least $20.00 and higher. Interest rates are at 20% and higher. I know that banks will bargain with a consumer to lower the interest rates significantly by closing the credit card for use. My question is, isn’t it true that if one closes a credit card, it will look bad on their credit report and have a negative effect? Thanks for the help.
ETHAN
08/31/2009 at 11:47 am
PRESTON
Hi! Don’t close any credit accounts until there is no balance and you have no use for the card. Always call the banks and bargain for a lower interest rate.
On your cards with interest rates, open a credit card account that has a promotional interest rate (0% for 6mos to a year). Pay off that debt in a 6months/1yr or less from the time it is transferred, and you will pay no interest!!!! Closing a card doenst always look bad, but dont close every account you own. It is better to have a decent amount of available credit (to establish credit history, etc) then to close every acocunt you have. Definetly look into the balance transfer offers! Here is a website that i use:
09/02/2009 at 7:15 am
ALI
Sometimes if you call and ask to cancel an account then they will offer a reduced rate. Lately that is not happening as much. If you have a low rate and they notify you that it is going to increase, then you can cancel and lock in the lower rate, but you can’t use the card.
Try a balance transfer to another card to get a lower rate.
09/04/2009 at 4:16 am
HANS
It lowers your credit score, but sometimes you just have to close an account. For over 15 years I had a card with Capital One. My interest rate was 7.9% I was never later, never over the limit and always paid above the minimum, they still raised my interest rate to 17.9% I had the option to close the account and keep the 7.9% until the balance is paid. I closed it.