Credit card question

katiewhompus

Geez KW, stop being a post whore. Someone else starts posts!!

1) Our credit card has gotten a bit insane with vet bills, dental bills, and car repair. It has a relatively high interest rate so having to eat the interest for the next few months makes me unhappy. H and I have been wanting to open up a Discover card for a while now, and the latest promotion/thing is 0% interest on purchases and transfers for 1 year. I know I can pay it off in 1 year easily. Would it be a good idea/bad idea/neutral idea to transfer the balance to this card?

2) When we bought our couch we financed it and got a Citi card account. We will more than likely never use this card again. Do I close it or should I keep it open for credit purposes? Does this count like a normal credit card for credit? I would hate to have 4 cards listed for us but am wary of closing accounts.

We probably won't be needing excellent credit ratings for a year or so, but we are looking at getting H a new car in a couple of years.

LesPaul

You should keep the oldest card you have open, even if you don't carry a balance and don't plan on using it soon.  Part of your credit score is history; how long you have had credit and how responsibly you've used it.  Another part (more important, imo) is the ratio of used to available credit.  So, if you have had a card (Visa, MC, AmEx) for a few years that has a decent amount available, keep it open.  Four cards is not an excessive number for a couple to have.

zippityb

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_credit-card-question-1?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:fd5a01db-5207-43c8-b8a9-59f29b072a31Post:7b95a96b-7ac7-4a51-8914-ab3396ead70f">Re: Credit card question</a>:
[QUOTE]You should keep the oldest card you have open, even if you don't carry a balance and don't plan on using it soon.  Part of your credit score is history; how long you have had credit and how responsibly you've used it.  Another part (more important, imo) is the ratio of used to available credit.  So, if you have had a card (Visa, MC, AmEx) for a few years that has a decent amount available, keep it open.  Four cards is not an excessive number for a couple to have.
Posted by LesPaul[/QUOTE]

CC companies nowadays are starting to cancel dormant cards. They did this to me with a Discover card (which was my first card). It didn't have a balance on it, and it had been over 4 years since I used it, so they closed it. I would recommend setting up one recurring bill every month (like a cell phone bill or something) to get paid on that oldest card and then just pay that card off in full every month.

LesPaul

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_credit-card-question-1?plckFindPostKey=Cat:Wedding BoardsForum:17Discussion:fd5a01db-5207-43c8-b8a9-59f29b072a31Post:44ed3dc5-9b5d-40cc-b91d-7c8bb87cb1ac">Re: Credit card question</a>:
[QUOTE]In Response to Re: Credit card question : True, depending upon income, credit limits, & balances. If you have 2 cards with credit limits of $20k each and you owe, say $35k, not good.  If you have 4 cards with a combined credit limit of $20k and owe $1k fine.  Kind of depends of debt to credit ratio.
Posted by jcbsjr[/QUOTE]

This is true - what I meant by used to available ratio.  But four accounts is not excessive, unless they're all maxed out.  Now, if you had 4 Visas, 4 MasterCards, 4 gasoline companies, 6 department stores, etc, that would be too many.  Sounds like you're fine, KW.

SarahPLiz

1- Good idea

2- leave it open, but monitor your credit report. 

katiewhompus

The Citi one has a 29% interest rate and was just opened in July, so I don't want to ever use it. It was part of those "0% interest for a year then we sock it to you" deals.

The longest I've had is my current out of control one. I keep it around but it's turned into my main one because it's the largest credit limit (6k). My other cc is only 1k limit which is not helpful when you get a $1500 dental bill.

jemmini6

I'd make sure you know the fine print with leaving an unused card open.  I had one a while ago, which was my first credit card that I'd had since I was 18 that I paid off and wasn't using.  All of a sudden I was getting charged a $10/month "inactive" fee.  I didn't want to use that card anymore because of their ridiculous conditions ($9 to pay online, but if you paid by check, it was miraculously always late, even if paid the same day you got the statement), so I ended up just cancelling it.

pirategal03

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_snarky-brides_credit-card-question-1?plckFindPostKey=Cat:Wedding%20BoardsForum:17Discussion:fd5a01db-5207-43c8-b8a9-59f29b072a31Post:86824f30-9f1c-4a5e-90b2-58fb21bb9e25">Re: Credit card question</a>:
[QUOTE]Any open cc counts towards your credit score (whether 0 balance or not).  If you're not going to use it & you have a different cc to use for hotel reservations, etc, then I'd close it.  <strong>Part of your credit score looks at how much credit is already extended to you so if you don't need it, close it. </strong> I've always been wary of Discover cards.  I would look for other cc companies that are offering the same deal.  As a matter of fact, rather than open a Discover card account, I would call Citi and tell them about Discover card's deal and give them the opportunity to meet or beat it; you may end up getting to use your Citi credit without having to open another credit account (which would also look better for your credit score).
Posted by jcbsjr[/QUOTE]

Yes and no.  Part of your credit score looks at how much credit you have used in relation to how much credit has been extended to you.  So if you have two credit cards with $1000 limits, and use about $500 of one card and don't use anything at all on the other, you're using 25% of your available credit.  If you close that second card, all of a sudden you're using 50% of your available credit, and that doesn't look as good as 25% did.