Credit Card Debt and Closing Credit Card Account Tips
Author: dilang1213
Posted: Sat Mar 06, 2004 9:45 pm
Post subject: Credit Card Debt and Closing Credit Card Account Tips
Hello, I recently applied for a Citicard Balance Transfer with an obligated $100 purchase before May 26. When I received my card, I called to activate it, and at that time was asked if I want to transfer balance...which I did. My mistake, was that I should have spent the $100 obligation FIRST, then tranferred a balance...so as NOT TO PAY any interest til May 2005. NOW, I have to pay 27.99% on a $100, unless I figure another way to balance transfer the existing amount. The good news is that on the balance transfer, Citicard has a way of know that it is a balance transfer, and I will not get charged any interest.
My question: Is it wise to keep all of my accounts OPEN? Right now, I have about $25K in CC debt. I just wanted to transfer a few to 0% to help me with NOT having to pay FINANCE CHARGES, and using that money to pay DOWN the other debt. As I apply for 0% CC, should I close a few accounts? Will I have trouble continuing to open 0% balance transfer cards, if I have a large amount of credit open already? I am rebuilding my credit...REALLY watching the dates of Credit card DUE DATES. I want to build my credit back to EXCELLENT if possible. Does anyone know how long that may take since I have had 1 Mortgage late in the last year, and two CC lates in the past year.
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Author: Verne
Posted: Sat Mar 06, 2004 11:32 pm
Post subject: Credit Card Debt and Closing Credit Card Account Tips
If you have 25K in credit card debt, you don't want to close any accounts. In doing so you lose available credit and drive up your credit utilization percentage. This in turn may cause your existing card accounts to change your terms or even lower your credit limit, not to mention making new credit harder to get.
Closing accounts just doesn't help the score no matter how you slice it.
"My mistake, was that I should have spent the $100 obligation FIRST, then tranferred a balance...so as NOT TO PAY any interest til May 2005. NOW, I have to pay 27.99% on a $100, unless I figure another way to balance transfer the existing amount."
You made no mistake, at least in the order of the $100 purchase and the transfer. It makes no difference which you do first since future payments will be applied to the portion of your balance with the lowest interest first. In other words, the $100 portion of your balance is buried (paid off last) beneath the balance transfer portion which will be paid off first.
Ideally you should have fulfilled the $100 purchase obligation, paid that off, and then made the 0% balance transfer.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Sat Mar 06, 2004 9:45 pm
Post subject: Credit Card Debt and Closing Credit Card Account Tips
Hello, I recently applied for a Citicard Balance Transfer with an obligated $100 purchase before May 26. When I received my card, I called to activate it, and at that time was asked if I want to transfer balance...which I did. My mistake, was that I should have spent the $100 obligation FIRST, then tranferred a balance...so as NOT TO PAY any interest til May 2005. NOW, I have to pay 27.99% on a $100, unless I figure another way to balance transfer the existing amount. The good news is that on the balance transfer, Citicard has a way of know that it is a balance transfer, and I will not get charged any interest.
My question: Is it wise to keep all of my accounts OPEN? Right now, I have about $25K in CC debt. I just wanted to transfer a few to 0% to help me with NOT having to pay FINANCE CHARGES, and using that money to pay DOWN the other debt. As I apply for 0% CC, should I close a few accounts? Will I have trouble continuing to open 0% balance transfer cards, if I have a large amount of credit open already? I am rebuilding my credit...REALLY watching the dates of Credit card DUE DATES. I want to build my credit back to EXCELLENT if possible. Does anyone know how long that may take since I have had 1 Mortgage late in the last year, and two CC lates in the past year.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Verne
Posted: Sat Mar 06, 2004 11:32 pm
Post subject: Credit Card Debt and Closing Credit Card Account Tips
If you have 25K in credit card debt, you don't want to close any accounts. In doing so you lose available credit and drive up your credit utilization percentage. This in turn may cause your existing card accounts to change your terms or even lower your credit limit, not to mention making new credit harder to get.
Closing accounts just doesn't help the score no matter how you slice it.
"My mistake, was that I should have spent the $100 obligation FIRST, then tranferred a balance...so as NOT TO PAY any interest til May 2005. NOW, I have to pay 27.99% on a $100, unless I figure another way to balance transfer the existing amount."
You made no mistake, at least in the order of the $100 purchase and the transfer. It makes no difference which you do first since future payments will be applied to the portion of your balance with the lowest interest first. In other words, the $100 portion of your balance is buried (paid off last) beneath the balance transfer portion which will be paid off first.
Ideally you should have fulfilled the $100 purchase obligation, paid that off, and then made the 0% balance transfer.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 11:53 AM
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