# Credit Card question **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 26, 2006, 11:15pm UTC](https://boards.straightdope.com/t/credit-card-question/370369 "2006-08-26T23:15:15Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Caterpillar22](https://avatars.discourse-cdn.com/v4/letter/c/b5a626/32.png) [@Caterpillar22](https://boards.straightdope.com/u/Caterpillar22)\ **Post date:** [August 26, 2006, 11:15pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/1 "2006-08-26T23:15:15Z")
I have two credit cards, and they’re both completely paid off. I only need one of them, but my mom said that it would be bad for my credit to cancel a card, and I should keep the card and never use it. Well, I don’t want to pay the monthly fees on a card I never use! If I don’t need the card and I won’t be using it, is it really going to hurt anything if I just cancel it? ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [August 26, 2006, 11:19pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/2 "2006-08-26T23:19:43Z")
You’re paying a monthly fee? I say chuck the thing. Chances are you can get another credit card with no fees to replace it. ---
**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\ **Post date:** [August 26, 2006, 11:28pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/3 "2006-08-26T23:28:15Z")
Generally speaking you want to keep your oldest credit card account because it creates the longest possible credit history. The longer you’ve had credit in good standing the better your credit score. However, I doubt that the hit you’d take on your credit rating is going to be worth the continuous monthly fees. I certainly wouldn’t keep a paid-off card open if it was costing me a fee. You might want to apply for another card while you still have the two cards and, if/when you get it, close the fee card. Two credit accounts in good standing are better than one, or so I’ve always been told by credit gurus. ---
**Author:** ![Antinor01](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@Antinor01](https://boards.straightdope.com/u/Antinor01)\ **Post date:** [August 26, 2006, 11:31pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/4 "2006-08-26T23:31:57Z")
Actually, having cards open that you don’t use can HURT your credit. When you go for loans and such they not only look at your balances, but how much available credit you have. With it only being two cards you’re probably ok, but it’s something to keep in mind. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [August 26, 2006, 11:34pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/5 "2006-08-26T23:34:38Z")
Call one of the card companies and tell them you want to cancel your account. They’ll do anything to talk you out of it, including waiving all fees forever. 😃 ---
**Author:** ![Caterpillar22](https://avatars.discourse-cdn.com/v4/letter/c/b5a626/32.png) [@Caterpillar22](https://boards.straightdope.com/u/Caterpillar22)\ **Post date:** [August 26, 2006, 11:38pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/6 "2006-08-26T23:38:25Z")
The finance charge is the interest accumulated, right? (Yeah, I’m clueless) I know you can request a higher limit, is there any way to request a lower interest rate, or does it go down over time? I get the feeling my age is working against me (I’m 22). I’ve only had two late payments in the 3 years I’ve had credit, and I’ve never gone over my limit (though both cards until now have been pretty much right on the limit). I don’t know why both of my cards have rates that are so high. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [August 26, 2006, 11:53pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/7 "2006-08-26T23:53:48Z")
You can negotiate anything. Interest rates do not go down over time, but they can go up, if you miss a payment. However, with some cards, if you prove you are a good customer they may raise your credit limit automatically (my Visa does this. I’m nowhere near the limit.) The rates are high probably because you’re young and didn’t have an established credit history, so the companies were taking a big risk extending you credit. Now that you’ve got some experience under your belt, see if you can get a better card. Check with your bank. I would think as long as your late payments weren’t more than 30 days late, you should be fine. ---
**Author:** ![Antinor01](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@Antinor01](https://boards.straightdope.com/u/Antinor01)\ **Post date:** [August 27, 2006, 12:04am UTC](https://boards.straightdope.com/t/credit-card-question/370369/8 "2006-08-27T00:04:23Z")
[QUOTE=Caterpillar22] The finance charge is the interest accumulated, right? (Yeah, I’m clueless) I know you can request a higher limit, is there any way to request a lower interest rate, or does it go down over time? I get the feeling my age is working against me (I’m 22). I’ve only had two late payments in the 3 years I’ve had credit, and I’ve never gone over my limit (though both cards until now have been pretty much right on the limit). I don’t know why both of my cards have rates that are so high. [/QUOTE] You can request a lower interest rate. I’ve done it before myself, called up the company and asked if there was anything they could with my interest. They put me on hold for a minute and when the woman came back they offered me a rate 6% less than what I had already. ---
**Author:** ![Turek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/turek/32/18782_2.png) [@Turek](https://boards.straightdope.com/u/Turek)\ **Post date:** [August 27, 2006, 12:34am UTC](https://boards.straightdope.com/t/credit-card-question/370369/9 "2006-08-27T00:34:09Z")
I’ve alwasy been of the impression that cancelling credit cards OF YOUR OWN ACCORD was a _good_ thing, or at least a neutral thing. Is that wrong? ---
**Author:** ![tremorviolet](https://avatars.discourse-cdn.com/v4/letter/t/e47774/32.png) [@tremorviolet](https://boards.straightdope.com/u/tremorviolet)\ **Post date:** [August 27, 2006, 1:04am UTC](https://boards.straightdope.com/t/credit-card-question/370369/10 "2006-08-27T01:04:27Z")
[QUOTE=Turek] I’ve alwasy been of the impression that cancelling credit cards OF YOUR OWN ACCORD was a _good_ thing, or at least a neutral thing. Is that wrong? [/QUOTE] It can be bad for a couple of reasons. If you’re closing an older card, you’ve eliminated a established credit source and part of your FICO score is based on length of established credit. Having multiple credit sources reporting also helps. If you only have one card, that’s not a lot of info. In addition, there are three credit agencies and credit cards report to different ones. If you only have one card, it may only report to, say, Equifax which could be a problem if your car laon people pull the Transunion score. Also, you want to keep your debt to credit limit below 10%. Say you’re carrying a balance of $1000 on a single credit card with a $2000 limit. Your debt to CL ratio is 50% which looks bad. But if you have several cards with a total limit of $10,00, the $1000 debt now looks much better. The conventional wisdom that **Antinor01** mentions about keeping your credit limits low, doesn’t apply as much today. If you have multiple cards with higher limits _and_ low balances and a good payment history, your FICO score will be a lot higher a person who has a single card with a very low limit. However, given the OP’s young age, short credit history, and monthly fees, he should probably cancel the card if he can’t negotiate for a lower interest rate and lower fees. It’s not worth keeping open if he has to pay. If anyone wants to read more about credit or ask more questions, check out [The Credit Boards](http://creditboards.com/forums/). I originally found the Credit Boards through a link from here and it’s a great site. Those guys know a _lot_ about how the credit scoring system works and I am much more educated about good credit. USing some techniques from those boards, I was able to raise my credit scores from 690’s to above 750. There’s so much info on that site, it can be overwhelming but stick with it; it’s totally worth it. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 27, 2006, 1:05am UTC](https://boards.straightdope.com/t/credit-card-question/370369/11 "2006-08-27T01:05:37Z")
One factor in determining a credit score is the ration of available credit to the balance owed: > [@](#): > > Listed below are the top factors that raised your score. They are listed in order of importance. > > You’ve paid your bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy, on your report. You can be proud of the fact that you are helping yourself maintain a good credit score, so continue with the positive credit behavior! (P-A) > > You have a good cushion of available credit between your current balance and your credit limits on all open trades. This has a positive affect on your credit score. This cushion shows lenders that you are unlikely to overextend yourself financially. If you keep paying your bills on time and keep your credit balances low, you will likely continue to enjoy a positive credit score. (P-I) > > The total balance on all your credit cards is relatively low compared to your total available credit limit. This has a positive impact on your credit score. If you continue to keep a comfortable cushion between your outstanding balance and your credit limit, you will show lenders that you are not likely to become overextended. (P-J) > > Your average credit limit for your major credit cards, such as VISA or MasterCard, is high. This tells lenders that you have enough financial experience, and they will be more likely to see you as a good credit risk. Keep paying all your bills on time and minimizing your outstanding balances and you should have no trouble obtaining the same high credit limits on future credit accounts. (P-F) As it happens I have several credit cards and they all have high limits. I only use three of them: One for gas and normal purchases, one for online purchases, and one for the occasional high-ticket purchase. Except for the ‘high ticket’ one (I’m still paying on a camera) I pay off the balances in full each month. (It helps that I haven’t been buying much stuff.) There are several cards on my credit report that say ‘Credit line closed-consumer request-reported by subscriber’. I’ve heard that closing accounts can negatively affect your credit score. Indeed these accounts are showing up on my report years after I closed them, so you know that they are a factor. But I’ve collected enough cards that I don’t use that I have a nice ‘cushion’, as they say. So does it hurt to have ‘too many’ credit cards? Maybe. But having several you don’t use doesn’t seem to hurt, and seems to help. How many is ‘too many’? I don’t know. Incidentally, it doesn’t hurt your score if you request a credit report. That’s a ‘soft enquiry’. However if you apply for credit you get a ‘hard enquiry’. When I applied for my latest credit card (which offers airline miles for the airline I almost always use) my credit score dropped six points. I haven’t received my first bill yet, but I’ll be watching to see if my score rises again when I pay it. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 27, 2006, 1:08am UTC](https://boards.straightdope.com/t/credit-card-question/370369/12 "2006-08-27T01:08:28Z")
[QUOTE=tremorviolet] If you have multiple cards with higher limits _and_ low balances and a good payment history, your FICO score will be a lot higher a person who has a single card with a very low limit. [/QUOTE] Or what **tremorviolet** said… ---
**Author:** ![Reply](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/reply/32/15952_2.png) [@Reply](https://boards.straightdope.com/u/Reply)\ **Post date:** [August 27, 2006, 1:48am UTC](https://boards.straightdope.com/t/credit-card-question/370369/13 "2006-08-27T01:48:20Z")
You can definitely negotiate with them, especially if you threaten to cancel the card. I’m 22 as well and I’ve had a few credit cards. I’ve had the credit limit on a few cards automatically increase, but the interest rate has only ever gone up and not down. I have, however, called several of my card providers to ask for lower interest rates or higher credit limits. They were usually willing to do so, even if only by small amounts. Doesn’t hurt to ask. If you don’t complain, they’re just going to assume you’re a sucker and keep on charging you whatever fees they can – why wouldn’t they? They’re making free money off ya. If your credit is reasonably good, you might also be able to shop around for a better card that doesn’t charge a monthly/annual fee (many don’t), that has a lower APR, and that provides other useful perks (virtual card numbers, extended warranties, travel benefits, price protections, concierge services, cashback, etc.). Unless you have really bad credit, there should be many companies dying to offer you all sorts of fancy cards. Use that to your advantage and find the best deal you can. My first card was a Bank of America student credit card that just plain sucked. The APR was horrible (more than 23%) and the credit limit stayed at $600 for as long as I had it. After I used it for a year or two and built up enough credit, I applied for an offer I found online that offered much, much better terms (5.9% and a much higher limit). Afterwards, I called Bank of America and told them I wanted to cancel my card because the terms were bad. They immediately changed it to a non-student card, halved the APR, and increased the limit. ---
**Author:** ![Turek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/turek/32/18782_2.png) [@Turek](https://boards.straightdope.com/u/Turek)\ **Post date:** [August 27, 2006, 1:51am UTC](https://boards.straightdope.com/t/credit-card-question/370369/14 "2006-08-27T01:51:36Z")
So I’ve been screwing myself because I close accounts I don’t use and request that my major cards reduce my credit limit? :eek: ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [August 27, 2006, 2:18am UTC](https://boards.straightdope.com/t/credit-card-question/370369/15 "2006-08-27T02:18:47Z")
[QUOTE=Turek] So I’ve been screwing myself because I close accounts I don’t use and request that my major cards reduce my credit limit? :eek: [/QUOTE] Not necessarily. If you’ve only had credit a short time it probably makes sense to keep establish crredit lines, but if you’ve had good credit for awhile closing old cards actually can increase the amount lenders are willing to lend. I closed a bunch of old cards with high limits and not all that competitive APRs (or they had fees), and my credit score improved. Too many open credit lines (ie cards) even if unused can be viewed as a potential risk factors from a lenders perspective. ---
**Author:** ![Caterpillar22](https://avatars.discourse-cdn.com/v4/letter/c/b5a626/32.png) [@Caterpillar22](https://boards.straightdope.com/u/Caterpillar22)\ **Post date:** [August 27, 2006, 2:52am UTC](https://boards.straightdope.com/t/credit-card-question/370369/16 "2006-08-27T02:52:07Z")
Argh, I forgot about a department store card that I have (I don’t usually pay on it, my mom does). However, I just put $800 on it, so the balance is at $110 (it has a $1200 limit). Taking into consideration what everyone has said (thank you for all the advice, btw), I should keep all three because I’m young and need to establish more of a history with more than one line of credit? The spending has gone down quite a bit for me - as I sold my car (where all the money came from to pay off the cards), and I don’t have to pay for gas anymore. Plus, I’ve been a lot better about spending and saving these days, and haven’t used any credit in the last couple of months. So - as of right now, I have two all-purpose credit cards that are at a balance of $0, and a department store credit card that has a very small balance. $110 of debt to three lines of credit that add up to $2400 isn’t bad, right? The goal is to stop doing so much clothes shopping (the lack of car helps set that goal into motion, heh), and use the two other cards sparingly and pay them off every month? Then again, I’ve also been told that paying them off every month is a bad thing…grrrrrrr. ---
**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\ **Post date:** [August 27, 2006, 4:18am UTC](https://boards.straightdope.com/t/credit-card-question/370369/17 "2006-08-27T04:18:31Z")
[QUOTE=Caterpillar22] The goal is to stop doing so much clothes shopping (the lack of car helps set that goal into motion, heh), and use the two other cards sparingly and pay them off every month? Then again, I’ve also been told that paying them off every month is a bad thing…grrrrrrr. [/QUOTE] So mix it up a little. Put a small amount on each card and alternate paying them in full every month. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [August 27, 2006, 6:31am UTC](https://boards.straightdope.com/t/credit-card-question/370369/18 "2006-08-27T06:31:45Z")
NOTHING wrong with paying them off every month. Whoever told you that was confused or working on outdated information. Look, if there’s a monthly fee, pitch it. Your credit can recover from even the worst damage closing that account could inflict, which wouldn’t be much. I advise you to structure your life so you don’t HAVE to borrow for anything but 3/4 or less of your house on a 15-year note (cards paid off within the month aren’t really borrowing…). If your 22-year-old self follows that advice, your 44-year-old self will thank you. ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [August 27, 2006, 1:41pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/19 "2006-08-27T13:41:26Z")
I never heard of a monthly fee for the CC, how much is it per month? I can’t see any reason to pay a fee for a CC, monthly or anual. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [August 27, 2006, 1:46pm UTC](https://boards.straightdope.com/t/credit-card-question/370369/20 "2006-08-27T13:46:24Z")
Capital One does this, if you don’t want to pay the annual fee, they spread it out over the months. When they told me they were going to implement this fee on my credit card with them (that had been previously fee-free) I dropped them and got one through my bank. It’s why I will never get an American Express card. I’m already paying interest, I will not pay a fee on top of that. [Next page](https://boards.straightdope.com/t/credit-card-question/370369.md?page=2)