canadiandebtgirl

My Credit Cards

In Uncategorized on January 14, 2010 at 8:00 am

You’ll notice, if you ever visit the actual blog and scroll way down to the bottom, that my credit card total amounts have changed slightly.

Credit Card #1 was paid off back in May and is now just used regularly for gas purchases paid monthly.

Credit Card #2 is a VISA, and the card I’ve had the absolute longest.

Credit Card #3 is my newest card, and was opened to transfer some higher interest debt on a balance transfer offer of 1.99%. Unfortunately, that ran out in December 2009 and it still wasn’t paid off. I still had $2,899 left. I don’t want to pay their insanely high regular interest rate of 19.9%.

Credit Card #4 is actually a LOC and is last on my debt repayment plan as it has the lowest interest rate.

For months prior to December, I was calling Credit Card #1 to see if they had any balance transfer offers I could use. Nadda. I really REALLY don’t want to apply for ANY NEW CREDIT if at all possible, so new balance transfer offers on new cards or any LOC’s are not an option.

This left me with a balance transfer to a lower interest rate card that I already have.

This means the new debt on my Credit Card #2 is now what was remaining PLUS the transferred balance from Credit Card #3. This will actually save me about $300 over the life of the balance versus just leaving it on Credit Card #3. Figured it was the best option I have available.

BUT, this means I can now close Credit Card #3. Hurray! (Maybe?)

Question: should I cancel Credit Card #3 now, taking a temporary dip in my credit score, or should I lower the limit to the lowest possible and wait until I can get my two other cards to 75% of their limits (which increases your score) before cancelling it?

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  1. Perhaps you could lower the limit and then cut up the card so there’s no temptation. Than when the other debts are below 60% of their balance, further increasing your score, you can dump CC #3. You could also apply the same logic to CC #1 if you want – that way the potential credit you have to your name is lower – thus making you a better credit risk when looking to buy a home later.

    Just a thought.

    • That is a great idea. We already have a home (and a mortgage, hurray) so that’s not an issue. But I do worry if we ever decide to refinance or to buy another home. I just want to be sure my credit rating is as high as it can be so I am not limiting us as a couple for those major purchases. Mainly I worry about buying our second home.

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