Closing a CC..
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| Sun, 03-12-2006 - 11:36am |
after reading a previous post, i'm still a little confused. i am planning to pay off and close a credit card on the 20th of this month. it was only used the day i applied for the card (april of 2005), but it has apparently gained alot of interest and incurred an annual fee.
i would like to pay the card in full and immediately close the account, but how much damage can that do to one's credit? if it matters at all, it was a Target RedCard. does the company/brand matter at all (as to how much damage it can do)? and what about the max limit that was set? (it was $200). can the limit also play a factor in how/how bad it affects your credit?
*after checking my credit report today (thanks to a poster on this site who had a link to a free report!!), i found that i have 17 accounts in 'good standing'(WOOHOO!!!!!) and only 1 'potentially negative' mark against my credit: this target card. what will happen after i pay the card off? a zero balance, right? but i'd still have to pay an annual fee on a card that i don't even possess? would it be better (for my credit) to keep the account balance at zero and incur the fee or is one mark really going to affect my credit that much in the first place? i know most of you guys are experts on these kinds of things, so all the info you can give me about stipulations/fees i might incur/damage to credit from closing a credit card would be great.
TIA.
-kara
Edited 3/12/2006 2:18 pm ET by kara_b2006
Edited 3/12/2006 2:20 pm ET by kara_b2006

Kara - store cards are a waste - since you only used it once and you clearly had enough credit history to get it in the first place, just go ahead and close it.
All my best,
Danni
Hello Kara,
The only major change you would see on your credit report after closing a credit card is if it was your oldest account. Since it's fairly new and you'd have to *pay* an annual fee just to keep it open, I would also suggest closing it as quickly as possible.
My credit score varies month to month, even though I haven't closed a credit card in over 2 years. It varies between 680 and 720, depending on how much available credit I currently have. Basically, every time your creditors report a payment made, your score goes up a little. Negative items will eventually fade in importance as they age. The "missed payment" will show up on your report whether you closed the account or not, so go ahead and close it. Keeping your other accounts current will help keep your credit score high.
Personally, I don't care what my credit score is. We have paid off our car, have an emergency fund of a year's expenses, and are working to pay off our mortgage and credit cards within 3 years. After the debt is gone, I hope I never have to carry a credit card ever again.
I'm really sick of being in debt and sooooo ready to get back to "debt free"!
Sincerely,
Lindsey Schocke
Sincerely,
Lindsey Schocke
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