Would someone mind answering a question about CCs.

[freethought]

Recently, paid off two credit cards that had an elevated but not crushing balance on them. I was like, "Yaaaaay! Now I'm going to cut the cards up and tell BankAmerica to F__k Off!"
Then, I received a piece of advice from a questionable source that closing a credit card account can actually hurt your credit score.
WTF!!! I decrease or eliminate my high-interest debt and the CC companies penalize me for it?
Right now my credit score is pretty good, the higher half of 700. I would hate to hurt it since I will likely be searching for a new home in the next few years.

Can anyone confirm for me the truth of this? Is this true or is it b______t? Has anyone had an experience along these lines?

Thanx in advance!

[SPKrazy]

1. It Does Go On Your Credit Record As

the card being closed

If you can leave it open without it costing you, that may be better?

:shrug:

[Kali]

2. I'd keep em if they aren't costing you anything -

might even carefully use them once in a while - WHEN YOU HAVE THE MONEY TO PAY THEM OFF RIGHT AWAY.

[jobycom]

3. From Bankrate.com

Closing accounts changes the length of credit history of your accounts because closed accounts, while still shown on the credit report, aren't included in establishing the length of credit history. It also can affect the amounts-owed calculations that look at credit lines available versus credit balances. Therefore, canceling a card, particularly one you've held a long time, can slice a few points from your score.

snip

If you plan to be in the market for a loan in the near future, then the obvious recommendation is to sit tight and not cancel these accounts. If you don't expect to need credit over the next one to three years, and you have a relatively long (and good) credit history on the national accounts you plan to keep, as well as balances totaling no more than 40 percent of your remaining credit lines, I don't see the problem in canceling these department store accounts all at once.

(The question was about department store CCs, hence the mention in the last sentence. Still true of CCs in general.)

http://www.bankrate.com/brm/news/DrDon/20070216_cancel_credit_card_score_a1.asp

[wildhorses]

4. that is NOT true--but, i would keep one major credit card open.

get rid of all store cards, pronto. good luck with the house hunting. too many credit cards will hurt your debt to income ratio.

[sbj405]

6. Agree. And keep the limit low. CC co. have a tendency to keep jacking it up. nt

[Omphaloskepsis]

5. I would talk to an Accountant in your state.

The internet is a piss poor place to look for this type of advice. Laws vary by state.