To successfully close an account, you must first have a zero balance on said account. Otherwise, you will still receive bills on that balance, which can and probably will accrue late charges.
Generally, after two (2) months, the balance transfer from one card to another only minorly impacts one's credit. The key is the additional or new account and the utilization of the line on the account. If you transfer a balance to a NEW account as part of the application/onboarding process, your credit score will be reduced. If you transfer a balance to an EXISTING account that you don't use regularly, your credit score will be reduced. If you transfer a balance to an EXISTING account that you use on a regular basis, your credit score will either remain the same or be reduced.
== == Yes, when you transfer a balance you are required to close that account. Closing an account decreases your score up to 20 points. You then increase the balance of a new account. Opening a new account decreases your score up 20 points. If you have a balance on an account that is already open and your transfer more money into that account you are increasing your balance; which will decrease your score up to 20 points. So, be careful with this process, and be aware of the affects.
I've heard that if you keep your old account open (even with zero balance) can actually improve your credit score. The longer you keep credit card accounts open with out generating massive debt the more likely you'll get a better credit score. Depending on how large your balance is will really determine rather your credit score will get hurt or not (some will argue that it will not change your credit score but the answer varies from one opinion to the other) . You will be charged a fee by your previous credit card company though. Do not close your previous credit card account if you wish to improve your credit score, for some credit score companies may use it as a penalty against you (e.g. FICO).
The "excessive amount owed" is a phrase used to indicate that a particular account is over 30% utilized. Utilization is the balance of the account divided by the credit line. SO, if you have a $2,000 balance and your credit line is $3,000, your utilization is 67%, which would trigger an "excessive amount owed" in a credit score explanation.
Closing accounts can actually lower your credit score. The reason is that a portion of the score is made up by considering the amount of credit available to you versus the amount you are actually using. For example, if you have a credit card with a $10,000 limit and a $5,000 balance you are using 50% of $10,000 available. If you pay off the $5,000 and leave the account open you are using 0% of $10,000 available and that helps your credit score. If you pay it off and close the account the available credit goes to zero which is worse for your score. Another component of your credit score is how long an account has been open, so you're better off having the same account for years rather than closing an older one and opening a new one. If you have too many accounts and really want to close some of them it's best to close the newest ones first and hang onto an account with a high credit limit and a good payment history. Closing any accounts will likely lower your score temporarily, but it will bounce back over time.
Yes, canceling a credit card always reduces your credit score. It never improves your credit score if you cancel a credit card account. If you have had the card for more than 2 years, or if you have a substantial amount of available credit at the time that you close the account, then the reduction in your credit score is even greater. However, if it makes sense to you to close the card, and you do not plan large purchases in the near future, your credit will recover without your feeling the difference.
Yes, having your credit pulled can lower your FICO score. Which is the score on your credit bureau report used in some cases to determine your credit worthiness. Each time you apply for a new account your credit is pulled whether or not you are approved. Closing accounts can also have a poor effect on your credit report.
Your score is like a report card, it takes time. Payment updates, opening a new account or closing an account could cause your score to fluctuate. If you plan on keeping the card after paying it off, this could help increase your score because it will show that you have an available line of credit. Having bank card accounts with a valid credit limit can have a positive impact on your credit score.
Just to add a little to the below answer; if the credit card in question is a fairly new credit card say opened in the last 12 mos or so, then I would advise to close it. If the account has been opened for a longer period of time, leave it open with a zero balance. Your credit score is not only derived by the balance vs the limit but also the length of time the account has been open and in good standing. Cancelling cards may not always be a good idea. Your credit score is based on several things, one of which is your available credit to current debt ratio. If you've paid of a card, it's probably a good idea to not make more charges on it, keeping it available as credit. That will show that, even though you have available credit, you're responsible enough not to use it all. It is better to cancel a card with a 0 balance than to close an account with a balance.
The interest rate, payment amount, items purchased, transfers are among factors which have no bearing on your credit. These things may affect your bottom line, but your credit score reflects other activities. For instance, opening a new credit card would generate an inquiry which MAY impact your score. Having a new account MAY impact your score. The proportionate balance on the new account MAY impact the score, (ie., you transfer a $2000 balance from an account with a $10,000 credit limit to an account with a $2500 limit). All of the factors, including what you are paying in interest rates, transfer fees and how this activity affects your credit need to be taken into consideration before you open a new account.
If you feel it absolutely necessary to "throw your card(s) away" after paying them off, I suggest to just cut the card, and toss. However, DO NOT, DO NOT close your credit card account! Why, you may ask . . . one of the things that effects your FICO score is your credit history with the credit card company. Another factor is the debt ratio. For instance, if you have a $2000 credit limit, and you have no balance on your card, that will positively affect your FICO score. But, on the same token, if you have a $2000 credit limit, with a $1500 balance on the card, that will reduce your FICO score.
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