CC .... let expire/cancel or keep?

[creeper]

Have VISA, credit line, and a Mastercard, all in good standing, but I haven't used the mastercard in over a year, but the account is still active .... wondering if I should use it a few times a month to buy gas or something just to keep it active, or let it expire, or cancel it.

Some conflicting information on the net, and most of the stuff I read was for Americans, so Im not sure if the same rule applies. They seemed to be under the impression that having 2 - 3 active accounts was best, mainly because accounts that have been active and in good standing for years and years are a good thing.

Thoughts?

[Cooked Rice]

I've always been told to keep them active, and just not use them.

[dj_rice]

Just keep it active but never use it. Cancelling it puts bad mark on your credit history.

[ExtraSlow]

I'ts nearly impossible to let a credit card expire. They just renew you and send a new one. At least that's how it worked for me.

Cancelling does put a minor bad mark on your credit history, but it only lasts a few years. Could be better to just have the credit limit reduced and then put the card in the frezer.

[adam c]

I cancelled one of my MC but that was because there was a yearly fee, still have one MC and AMEX

[Zhariak]

It won't just expire, a new card will be issued before it does.


To be honest, I wouldn't cancel it. This could be nonsense, but as far as I'm concerned, if you have good credit, and having credit accounts that you have access too, but don't use looks good (means your not borrowing money even though you can).

At the same time too, this could open the doors to gain access to more credit in the future.

[Bisklimpkit]

The only thing I'd be concerned about is if I was trying to get pre-approved for a large loan, like a mortgage. If I have 2 CCs and a LOC it lowers the amount I would be approved for by the same amount of credit I have available to me.

Like one of the posts above states, if you don't want the black mark from cancelling the card but you also don't want it to affect future lending amounts, I'd lower the limit to something like $500 and then put it into storage.

[03ozwhip]

im kind of in this situation. i have 2 credit cards 1 of which has an annual fee and i havent used it in forever and dont want it because of the fee, if i cancel it would there be some sort of mark on my credit? i dont want to pay an annual fee for something i dont use, even if it is only 59/year.

[rage2]

Some CC's will start charging you a service fee for not using it. I have a Visa that I rarely use, and they send me a letter letting me know that they'll charge me if I don't use it. I just use it for parking here and there.

[Q-TIP]

If there is an annual fee then you may be better off cancelling the card. When I switched to my RBC Avion visa from my old TD Visa I cancelled it under advise from both TD and RBC because of the annual fee. I also maintain a Mastercard that is rarely used. I feel that one Visa and one MC is better than 2 Visas in the off chance one network has a hiccup someday. It may be completely unfounded, but my card cancellation does not seem to have marred my credit history at all.

[creeper]

Luckily there is no fee or else I probably would cancel it as I have a bit of an aversion to paying any amount of $ for absolutely nothing.

[MintRacer]

my mosaic master card booklet said they cancel cards that are inactive after one year.

[codetrap]

We canceled ours simply to limit our exposure to CC fraud. I' surprised by the fact that it would put a black mark. If the card is in good standing, and you simply don't want it anymore, why would shutting it down be a bad thing?

[SilverRex]

i made the mistake of canceling one of my CC and it end up reducing my credit score as well as increasing my debt ratio which hurts on all account when trying to take out loan

at the end of the day, Id just keep it active, even if it increases my exposure to fraud at least im covered and often I am not liable anyways.

if you have an annual fee card, then move to a no fee one. simply as that.

[J-hop]

.

[Super_Geo]

I have 3 CC... credit score has been steadily increasing. I mostly use the Visa, but I'll throw a couple of purchases on each MC to show an active use/repayment history on all cards.

MBNA Mastercard - every once in a while I'll take advantage of their 0.99-1.99% balance transfers and load 10-15k onto it and throw the rest in stocks, or even safe dividend yielding Canadian bank stocks (4-5% div). Pay it off in whole as soon as the promotion's over.

Capital One Mastercard - I hardly ever use it, but it has a ridiculously low interest rate for CC (currently at 3.5%), so if I need to buy something big enough that I can't pay it off in one credit cycle and don't want to bother with the LOC it goes on this card (although I just got an unsecured 4.5% LOC, so I doubt I'll be using this card much anymore).

RBC Avion Infinite - For almost all of my purchases, can collect up to 2% towards flights from points. Has a $60 annual fee, but definitely pays itself off.

[J-hop]

.

[Rat Fink]

.

[v2kai]

i had one with annual fee I never really use, rather rack up the points on the other one. Rather than cancel I called in and asked them to downgrade the card to a no annual fee one. Seems to work well enough. I keep it for emergencies. Should make a case with glass covering and hammer and big red print reading 'smash in case of broke-ass'

[stealth]

I questioned if having a high limit on a credit card (40k) would affect my future lending amounts (mortgage), and the bank rep told me it wouldn't. Was she mis-informed?

I would like to get rid of it as I no longer bank with them (CIBC) and they charge me $120/year for the card. It is nice to have a card with that much room to play with, but if it has no benefit, I might as well cancel it.

[stealth]

Originally posted by stealth
I questioned if having a high limit on a credit card (40k) would affect my future lending amounts (mortgage), and the bank rep told me it wouldn't. Was she mis-informed?

I would like to get rid of it as I no longer bank with them (CIBC) and they charge me $120/year for the card. It is nice to have a card with that much room to play with, but if it has no benefit, I might as well cancel it.

?

[ExtraSlow]

Originally posted by stealth


?
Yeah, depending on your credit history and how close to the edge you run, having a credit card with a high limit can affect your ability to be approved for loans and mortgages.
Lenders assume that you already owe the full amount of your limit when doing their ratio calcuations.

[H4LFY2nR]

Originally posted by stealth


?

I was told by a bank's financial planner when I got a LOC that one metric that will affect you when applying for a mortgage/loan will be your overall income to available credit ratio. So yes, having a high total amount of available credit will hurt you when you want to apply. But she said it's no problem to reduce the limits on CCs or LOCs to get yourself to the ratio you want to apply with at that time.

[Tripz]

Originally posted by stealth


?

You can also downgrade your card to a Dividend card from CIBC as there are no annual fees and lower your limit while you're at it. It's a quick phone call and the number is located on the back of your card. I assume you had the card for quite some time.. I would keep it as a back up card for future needs.

[bulaian]

Originally posted by 03ozwhip
im kind of in this situation. i have 2 credit cards 1 of which has an annual fee and i havent used it in forever and dont want it because of the fee, if i cancel it would there be some sort of mark on my credit? i dont want to pay an annual fee for something i dont use, even if it is only 59/year.

Most companies like TD, CIBC, MBNA, etc usually have a few differrent cards available for customers. Call up the customer service and have your card type switched to a free one. That way you're not cancelling the card and you'll no longer have the fee

[stealth]

Originally posted by Tripz


You can also downgrade your card to a Dividend card from CIBC as there are no annual fees and lower your limit while you're at it. It's a quick phone call and the number is located on the back of your card. I assume you had the card for quite some time.. I would keep it as a back up card for future needs.

Yea I had it for a while, and when it was my primary card I used it for the Aeroplan miles. I will take a look at switching it to a dividend card.

[03ozwhip]

Originally posted by bulaian


Most companies like TD, CIBC, MBNA, etc usually have a few differrent cards available for customers. Call up the customer service and have your card type switched to a free one. That way you're not cancelling the card and you'll no longer have the fee

did that and they refused to switch me cards or remove the fee after all the longstanding bills i have paid when i used it i was pretty surprised. they said theyll waive the fee this time but i have to call in every year and try and get it waived then too.


i said fuck it and cancelled the card. i made an offer for every possible solution to try and stay with them and they failed to help me.

[Cos]

So is the concensus to let it ride? I have a mastercard that is cash back that I pretty much only use. I have a TD visa with $500 on it for online purchases only. I also have a BMO Airmiles card for about $15,000 that I havent used in a couple years. The airmiles sucked that is why I went with the MC. I was just going to shred it but it seems like a waste.

I dont need a mortgage or anything yet (mine is up for renewal in 3.5 years). I just dont see the point in having $50,000 in unsecured debt lying around.

[Sugarphreak]

...

[Sugarphreak]

...

[schocker]

Originally posted by Sugarphreak
This doesn't make any sense, why would cancelling a credit card put a bad mark on your credit history?

(Not being an ass, just asking)
IIRC your credit rating is based upon your amount of used credit compared to your total amount of credit available?

[dimi]

Originally posted by schocker

IIRC your credit rating is based upon your amount of used credit compared to your total amount of credit available?

So what if my credit limit is really low, and I barely use CCs? Always paid off on time, never a problem. I keep the credit limit low to avoid CC fraud issues. That means I don't have a credit rating?

[broken_legs]

Originally posted by creeper
Have VISA, credit line, and a Mastercard, all in good standing, but I haven't used the mastercard in over a year, but the account is still active .... wondering if I should use it a few times a month to buy gas or something just to keep it active, or let it expire, or cancel it.

Some conflicting information on the net, and most of the stuff I read was for Americans, so Im not sure if the same rule applies. They seemed to be under the impression that having 2 - 3 active accounts was best, mainly because accounts that have been active and in good standing for years and years are a good thing.

Thoughts?


NEVER EVER cancel credit.

1.) When you close accounts its reduces your credit score

2.) When you reduce your total available credit, if you are carryinga balance in another account, your credit utilization will go up - This also reduces your credit score

3.) If a 24 year fag at a bank tells you you need to close your line of credit or credit card to get your TDS in order, tell him to fuck off and ask to speak to someone important.

4.) You can game your credit score and hide massive amounts of debt if you have several accounts. The less account you have, the less ability you have to do this.

[adam c]

^ i've always been told the opposite from bankers that the more available credit you have the bigger the risk you are since you can activate it any time and be in big trouble

[broken_legs]

Originally posted by adam c
^ i've always been told the opposite from bankers that the more available credit you have the bigger the risk you are since you can activate it any time and be in big trouble

Yeah, that's exactly what they tell you. See #3.

[J-hop]

.

[Sugarphreak]

...

[BigShow]

Perhaps you guys are over analyzing this. Closing an account may reduce your FICO slightly, but there will be a note the account was closed at your request. The impact will never be to the degree of preventing you from obtaining credit, so really who cares :dunno:

[Xtrema]

Originally posted by BigShow
Perhaps you guys are over analyzing this. Closing an account may reduce your FICO slightly, but there will be a note the account was closed at your request. The impact will never be to the degree of preventing you from obtaining credit, so really who cares :dunno:

Yep. I applied for all kinds of store credit cards to get some savings to furnish my house in 03. My FICO took a hit to slightly under 700. I checked again 2 years later and it's back to over 780.

http://www.fico.ca/

Seems pretty valid info.

[CapnCrunch]

I cancelled a credit card and my score didn't change at all. There's so much misinformation in here.

[jwslam]

Originally posted by J-hop
I've also been reading online that if you carry a balance of more than 30% of your available credit on your cc at any time it can reduce your credit rating (regardless of whether you pay it off completely) is this true?

My cc has a very low limit ($2500 all I will probably ever need to be honest) and I always seem to rack up about 70% of that in a billing period. I always pay it off long before its due, have never carried a penny over and have obviously never paid interest, but I don't want to be killing my credit just because I put "too much" on my cc... Can someone enlighten me on this, I don't exactly want to increase my credit limit because I will never (in the next 10 years) need more than what I have now but if I'm negatively effecting my credit I will.
THIS. Same question. I have several cards but only use one at about 60%.

[CapnCrunch]

Originally posted by J-hop
I've also been reading online that if you carry a balance of more than 30% of your available credit on your cc at any time it can reduce your credit rating (regardless of whether you pay it off completely) is this true?


The 30% is definitely the number.

But I'm not sure if its calculated using one card, (eg. a balance of 1500 on a 5000 card, and another 5000 card with a 0 balance) or whether it's using 30% of your total credit available (eg. 1500 balance on a 5000 card + 1500 balance on another 5000 card).

Maybe someone else knows?

[Tik-Tok]

Originally posted by J-hop
I've also been reading online that if you carry a balance of more than 30% of your available credit on your cc at any time it can reduce your credit rating (regardless of whether you pay it off completely) is this true?


You have to remember your CC is rated on your credit score, only by the last reporting. The reporting being the same as your monthly statement. If you owe zero on your CC at the time the statement is created, then that's what your credit report will show.

So yes, 30% is correct, but not the "any time" part, just for the date of your statement.

[Cos]

Soooooo the answer is what then? Lol. Do I cancel my card or not.

[max_boost]

You know honestly I think you guys are too concerned about your credit rating. I could be totally off here, are there even any benefits of having a top tier credit score? Like 800pts+ is top 1%? :dunno:

I was told by my buddy at TD and he basically said, 650 is the minimum score you need. Anything over and it's not that important. My score has fluctuated between 762 and 724 in the past 7 years. Never been turned down for credit and now that I have a massive HELOC I don't even see why I would even apply another loan unless they are financing GTR's or 911 Turbos below prime. :rofl:

[BigShow]

Originally posted by max_boost
You know honestly I think you guys are too concerned about your credit rating. I could be totally off here, are there even any benefits of having a top tier credit score? Like 800pts+ is top 1%? :dunno:

I was told by my buddy at TD and he basically said, 650 is the minimum score you need. Anything over and it's not that important. My score has fluctuated between 762 and 724 in the past 7 years. Never been turned down for credit and now that I have a massive HELOC I don't even see why I would even apply another loan unless they are financing GTR's or 911 Turbos below prime. :rofl:

Exactly.

[Cos]

Well just cancelled my card so will let you guys know if my credit goes into the shitter.

[J-hop]

.

[Cos]

Originally posted by J-hop


Is there anything wrong with throwing extra money on your cc and using it more as a debit then a credit?

Unless you are getting your credit pulled all the time dont worry about it. What I did was payed off my CC and didnt use it for a week before I applied for my mortgage. It all showed 0 balance. As for using it daily it isnt a big deal. I only use my CC for the protection and for the cashback. I pay it off every paycheque or whenever I feel like it. I qualified for a mortgage roughly 4.5 times my salary when we applied and that was including still having my truck loan.

My credit is well over 7xx last time I asked my financial guy to take it.

[J-hop]

.

[max_boost]

If your score is over 700 I wouldn't even worry about it at all. You can check online at equifax.

[Cos]

Originally posted by max_boost
If your score is over 700 I wouldn't even worry about it at all. You can check online at equifax.

Is there any way to check for free? I always get a report every year from TransUnion and Equifax and then get my banker to tell me what my score is.

Free all around :D

[max_boost]

haha I know they can mail you your report but does that include the score?

[Cos]

Originally posted by max_boost
haha I know they can mail you your report but does that include the score?

No the free one doesnt. I bought one once but it is the free report + your score. I think it cost me $30.00

[triplep]

Originally posted by Cos


Is there any way to check for free? I always get a report every year from TransUnion and Equifax and then get my banker to tell me what my score is.

Free all around :D


you get your banker to check for you? You do realize that by them checking it, it is a hit on your credit. If it is just a soft hit (just look at the score, nothing else) that typically takes about 6 months to make itself up for the amount your credit went down for the soft hit. If they are pulling up everything, even if they are checking your credit for you and not trying to approve you for anything, it counts as a bigger hit.

The only way that your credit isn't effected is by you checking it through transunion/ equifax. The bank counts as a hit, even though it is only for your own purpose, it shows up as the bank did a check and not you.

[Cos]

Originally posted by triplep



you get your banker to check for you? You do realize that by them checking it, it is a hit on your credit. If it is just a soft hit (just look at the score, nothing else) that typically takes about 6 months to make itself up for the amount your credit went down for the soft hit. If they are pulling up everything, even if they are checking your credit for you and not trying to approve you for anything, it counts as a bigger hit.

The only way that your credit isn't effected is by you checking it through transunion/ equifax. The bank counts as a hit, even though it is only for your own purpose, it shows up as the bank did a check and not you.

The bank automatically pulls a soft hit every once and a while to verify your credit worthyness. That is what he is checking. I am not forcing a soft hit or a hard hit.

[triplep]

Originally posted by Cos


The bank automatically pulls a soft hit every once and a while to verify your credit worthyness. That is what he is checking. I am not forcing a soft hit or a hard hit.


I am pretty sure that the bank isn't allowed to pull any hits, be it soft or hard, unless you specifically allow them too... so if your bank is automatically pulling your credit every once in a while, i'd have a talk with them.

[Cos]

Originally posted by triplep



I am pretty sure that the bank isn't allowed to pull any hits, be it soft or hard, unless you specifically allow them too... so if your bank is automatically pulling your credit every once in a while, i'd have a talk with them.

I thought it had to do with when they randomly decide that your credit is worthy and you are pre-approved for a car loan, LOC, or CC increase.

[triplep]

Originally posted by Cos


I thought it had to do with when they randomly decide that your credit is worthy and you are pre-approved for a car loan, LOC, or CC increase.

nope, those pre-approvals are not based on your credit worthiness, they are based on how long you have been with them, what type of income they can see coming into your account, and how you are paying of any debts you have with them.

If you accept the pre-approval at that point in time they might do a soft credit hit on you, just to verify that what they see based on your accounts is legit and matched by your credit score.

As far as accessing your credit, even a soft hit, no bank is allowed to do that without your consent.

But in your case, if it is only happening once a year then it isn't that big of a deal as your credit will be back up to what it was in around 6 months.

[Cos]

Originally posted by triplep


nope, those pre-approvals are not based on your credit worthiness, they are based on how long you have been with them, what type of income they can see coming into your account, and how you are paying of any debts you have with them.

If you accept the pre-approval at that point in time they might do a soft credit hit on you, just to verify that what they see based on your accounts is legit and matched by your credit score.

As far as accessing your credit, even a soft hit, no bank is allowed to do that without your consent.

But in your case, if it is only happening once a year then it isn't that big of a deal as your credit will be back up to what it was in around 6 months.

Not sure if it is even once a year. When I moved my truck from one bank to my TD account at a lower interest rate I got it at that time. That could be why.

I just kind of assumed that they had it all the time (since they have all my banking now anyways).

I have only ever got my score twice, once from Equifax and one from Td.

[broken_legs]

Originally posted by Sugarphreak
I cancel credit all the time when I feel it is either inefficent or not needed, it hasn't negitively affected me.

I beg to differ.

Do you download your credit report multiple times a month? Do you see how a balance on one account affects your score while all other accounts remain the same? What affect keeping the balance the same on all accounts has over time? What happens when you close an account? What happens when someone reports a late payment?

I have done this, and saved the reports for just over 2 years. It's not cheap but it is very... informative.

Just throwing it out there. Believe or me not, totally up to you.

[broken_legs]

Originally posted by triplep


As far as accessing your credit, even a soft hit, no bank is allowed to do that without your consent.



Based on my research (downloading credit reports forever)


All of my major credit cards, my bank, my cell phone company have done and continue to do soft inquires every few months.

This happens a lot and it is not authorized, nor does it affect your credit score.


A HARD inquiry on your credit does affect your score.

[max_boost]

broken_legs is correct, soft inquiries don't affect your report but what exactly is a soft inquiry vs a hard inquiry? Assuming the hard inquiry the financial institution gets to see everything where as the soft? haha

[rob the knob]

i read this this year


explains sort of soft inquiry













Future Shop online checks customers' credit cards with Equifax
Last Updated: Thursday, January 13, 2011 | 12:00 PM PT CBC News

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Credit ruined over unknown Telus bill
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Financial Consumer Agency of Canada: Understanding your credit report and credit score
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(Note: CBC does not endorse and is not responsible for the content of external sites - links will open in new window)
A Future Shop spokesman says the chain checks with Equifax to ensure a credit card is valid and isn't stolen.
Future Shop, one of Canada's biggest electronics chains, is making soft credit checks on some online customers.

Communications manager Elliott Chun said the checks are a safeguard to make sure a credit card isn't stolen, and it doesn't affect a person's credit rating.

"From time to time, we may do what's called a soft inquiry, and we just want to confirm that the credit card being used by a certain customer is actually valid," Chun said.

The company's privacy policy informs customers of the practice, he pointed out.

The information appears in the third and final paragraph of a subsection headed "service providers," in the "Does Future Shop share your information" section of the company's privacy policy.

"Future Shop has taken precautions to prevent the fraudulent use of your information on our Web Sites," the paragraph states.

"Future Shop has adopted industry standard authentication procedures to ensure your protection while shopping with us online. This includes, but is not limited to, contacting financial institutions or credit reporting agencies to ensure the authenticity of your credit card and to validate your credit card billing information.”

The privacy policy, checked on Thursday, said it was last updated on July 7.

In an email to CBC News, Future Shop director of communications Christopher Bennett said: “Equifax looks at [the customer’s] credit report… and simply approves the transaction for us or not. We never see it nor do they provide it to us.”

Bennett said Equifax “give us a code word response like ‘success’ or ‘declined’ — that’s all we see. Nothing is recorded — it’s essentially like a red light/green light system. No report is ever pulled or seen by us.”

While the inquiry is visible to the customer in their credit report, Future Shop says a soft inquiry is never seen by other credit grantors.

Bruce Cran, president of the Consumers Association of Canada, says mentioning this practice in the privacy policy is not good enough.

He's received numerous complaints about the practice, Cran said.

"What the heck have we got credit cards for? If there's a problem with the credit card, it's up to the credit card company to identify it, not to the doggone store," he said. "It's not up to them to be checking these people without their permission. It's as simple as that.”

Future Shop is insured against purchases made with stolen credit cards, Cran said.

"Future Shop most certainly is not “insured” for credit cards-not-present transactions (those we do online at www.futureshop.ca ) as Cran states. Future Shop has a reduction in liability on Verified by Visa transactions — but still has liability. All other online transactions are fully liable to chargeback," said Bennett in an email.

Calgary shopper Balwinder Marwaha was shocked when he discovered Future Shop had made a credit inquiry via Equifax.

He bought Future Shop goods online during the holiday season, and found out about the check when he looked at his credit bureau information.

"I don't see why a credit check is required if I'm not applying for a Future Shop credit card. I'm [paying] with my own personal credit card, which I've already got approved to me," he said. "Why does Future Shop need to check to see if I'm adequate? It doesn't make sense."

He said Future Shop never responded to repeated calls for an explanation.

[triplep]

From what I have experienced, a soft hit only shows your credit score, and whether or not you have any flags on your credit.

I am wondering how often you get you credit reports?? As far as a soft hit, I know it effects your score but it is very minimal, if you are only pulling your score every 6 months or 1 year chances are you don't actually notice the soft hit on your credit rating.

Also, once you do a credit check at the bank, they keep it on record for a certain amount of time so that they don't keep doing soft hits on you.

Again, this is all from my explanations from working at a bank and being a credit lender.

Mind you, I think even the people that issue your credit score have no exact idea as to how your score is calculated. I think credit scores are a lot like women, you never truly lknow what the hell you are dealing with and how you got there in the first place.