Little or No Balance?

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Meltdownblitz
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Little or No Balance?

Postby Meltdownblitz » Wed Jun 08, 2011 5:58 pm

Is it better to have little or no balance on your credit cards? Sorry if this has been asked quite a few times, I couldn't find any threads to my interest in the search feature.

And for instance I have 4 store cards and 4 major cards. Should I keep or cancel the store cards? Because I've seen that its better to have history with major card companies?

Thanks.


NYC_Dweller
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Postby NYC_Dweller » Thu Jun 09, 2011 11:01 am

It is better to have credit card utilization in my opinion paying in full every month. As for the store cards keep them in you junk draw instead of cancelling them. Cancelled card can have a negative effect on your CR while having a long history is a positive.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Mon Jun 13, 2011 9:29 pm

When you mean little to no balance are you talking about a balance you pay of every month or one that's carried forward? For credit scoring you do not need to carry a balance and there is no benefit in doing that. If you use your account and pay off the bill in full when it comes, that amount owed is still reported.

Never having any activity on your card would likely be viewed as negative as it would be considered an inactive account. If the store cards serve you no purpose I would consider cancelling some or all of them but now that they are open there's no harm in keeping them. Even if you cancelled them today they will still be reflected on your credit record for years to come.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
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Primary Travel Card: Chase Sapphire Preferred

Meltdownblitz
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Postby Meltdownblitz » Tue Jun 14, 2011 3:01 am

Mogul of Pineapples wrote:When you mean little to no balance are you talking about a balance you pay of every month or one that's carried forward? For credit scoring you do not need to carry a balance and there is no benefit in doing that. If you use your account and pay off the bill in full when it comes, that amount owed is still reported.

Never having any activity on your card would likely be viewed as negative as it would be considered an inactive account. If the store cards serve you no purpose I would consider cancelling some or all of them but now that they are open there's no harm in keeping them. Even if you cancelled them today they will still be reflected on your credit record for years to come.


Perfect you answered my question, thanks. I was confused on this for a while, much diff info out there about this. One more question, how long usually until your account goes "inactive"?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun Jun 26, 2011 8:57 pm

Do you mean how long until FICO considers an account as inactive? That's tough to say because their formula is kept secret but my guess would be if the card has a $0 balance for more than a few months, it might be weighed differently than a card that has monthly activity. If possible, at least try and use the cards once every year but ideally more like once every 6 months, if it's not too much trouble to do.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

Meltdownblitz
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Postby Meltdownblitz » Mon Jun 27, 2011 10:57 am

Thanks! Will They alert you before close your account?

dfm990
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Postby dfm990 » Mon Jun 27, 2011 4:16 pm

Im not too sure about the alert, but i did want to mention that i've heard, that if the credit card has an annual fee chances are that the company wont cancel it on their own.
Amex Gold NPSL (35000 Approved)(11/13)
Discover It $22500 (12/13)
Bank of America Cash Rewards $7000 (3/13)
Amex BCP $6000 (12/14)
Walmart Store Card $3050 (2/10)
Capital One Platinum $2000 (3/11)
Chase Slate $1000 (1/16)

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Postby Money card » Wed Jun 29, 2011 10:02 pm

I would say since you don't work at any of the stores I would not use your store cards over the years they will deactivate, my Kohls card lasted only 7 years. A Lord & Taylor sales person told me it's better just to let them deactivate. If you don't have an American express but you have a Nieman Marcus card continue to use this one.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Jul 13, 2011 7:52 pm

Will They alert you before close your account?


Sometimes, but sometimes not. Years ago I stopped using my Amazon card and received a 60 day notice that my account would be canceled if the account remained to have no activity on it. I made a small purchase and everything was fine. I believe the time it took for that to happen was a year of no activity but I think the time varies. As dfm990 said if you are paying an annual fee it is highly unlikely your account will ever be canceled, even if you never use it.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred



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