Should I Close My Credit Card? How You Can Improve Your Credit Score Here ph
Should I close my credit card? This is a great question that I get all the time, and today I’m going to break it down. First we have to understand what a credit card actually is. Yes, it is a piece of plastic that we can use when we want to buy “stuff”. No, it’s not paper money; however, sometimes we look at it as if it were. A credit card is almost like a paycheck that is based off of your name. It’s always going to be there no matter if you have a job or not. Let’s look at it a little closer. A financial institution gave you this credit card with some sort of credit limit because they trust that you will pay them back and they get to make a little money off of you in the process. It doesn’t matter if you have a $300.00 dollar credit limit or a $10k credit limit, the fact is, you are trusted in some way with a certain amount of money. Now, I’m going to paint a little picture for you. The years go by and let’s say you have five credit cards that you are not really using and you are thinking about closing the credit card account. The real question is why you are not using those credit cards. Is it because of high interest? Or maybe it’s because of the perc’s the card offers are not all that great. Out of those five credit cards you total amount that you can spend is somewhere around $2k – $5k, and that’s great, but you just don’t use the accounts. It’s important to understand what happens when you close the accounts, let’s look at the details a little closer. Walking away from credit history Giving up available credit limits In short, you are saying, “No, I don’t want to show that I’m trusted with this high of available credit.” If someone ever tells you to close the credit cards that you are not using, do not listen to them. Walking away from credit history This means that all the positive credit history that is showing up on your credit report will no longer be factored into your credit score. By doing this you are saying that you do not need positive credit history because you are just so awesome as you are. Giving up available credit limits
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These are just fictional numbers, so I’m just hypothetically speaking. This means that you started out with $20k of available credit with all your credit card accounts, and now, you are saying I want to show that I’m not trusted with as much. You are saying, I don’t want companies to know that banks trust me with so much, I want them to know that I’m only trusted with small amounts. Needless to say, this is not a good thing. Imagine you are trying to get a job and you’ve got a masters degree in business management. You find a company that you are really interested in, but instead of putting on your resume that you have a master’s degree, you say you have an associate’s degree. Now, you are probably thinking “Why in the world would I do that? I’m just selling myself short!” I completely agree and that’s exactly what you are doing with your credit resume. You are in fact selling yourself short when you start closing credit cards. In closing, do not sell yourself short with your credit cards and credit score, we have a hard enough time in this economy as it is. There’s no need to add more road blocks initiated by ourselves. If you want more information on credit tactics or, you would like to own the best do it yourself credit repair book on the market today. Click Here, it’s only $6.99 and it comes with two free gifts!
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Do's and Dont's of the Credit Card Game Here pf Futhermore: Should I Close My Credit Card?
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