Why is canceling your credit card bad for your credit? If records show you always pay on time, why is it bad?
They said if you cancel you credit card, it’s bad for your credit. But why? If you always paid in full and on time, why is it bad for your credit if you decided to cancel them?
Because if you cancel your credit card, then the banks can’t screw you with ridiculous rates and fees. If they tell you they will damage your credit, then they can screw you by forcing you to pay higher rates.
The banks are out to get every damn penny they can from anyone they can- PERIOD. They invented the credit record scam to keep people enslaved to their practices. Go to a credit union instead of the scum bag banks. Credit unions don’t have to answer to Wall Street like banks do and so their priority of service is on their members and not the Wall Street profit suckers.
A lot goes into figuring out a credit score, but one of the reasons your score will sometimes get lower is because when you cancel a credit card, it increases your overall balance to limit ratio.
Say you have 2 credit cards. One with a limit of $100 and one with a limit of $1,000. If you carry a balance of $50 on both cards (total of $100 in balances) your balance to limit ratio would be a small 9.09% ($100 total balance/$1100 total limit). If you were to cancel your $1,000 card, your Balance to limit ratio would increase from 9% to 50%. High balance to limit ratios kill credit scores.
That’s one reason your score will drop. Let me know if you have any questions.
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – credit-report-free.totalh.com