Author Topic: Starting 2015 with no credit card debt .. do I close those cards now?  (Read 3077 times)

LiseE

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After aggressively paying down our credit card debt since getting on board with MMM back in April, we are happily starting 2015 with zero credit card debt.  That's right .. credit card debt in April = 38K and now ... 000000000! Whew does that ever feel good!

My question is regarding the credit cards that I now currently hold.  I know that keeping them open is good for my credit rating because of the age of the credit line however I was hoping to take advantage of some of the great credit card rewards programs that I've been reading about on this site. 

So, do I keep my existing cards open (and pay the annual fee) even though I'm probably not going to be using them and may start using a new account and start accessing those reward programs?

Also, one of my oldest cards states that I will get 1 frequent flier mile for every dollar spend on eligible purchases and when I read the footnotes it stated that cash advances qualified.  Couldn't I rack up significant miles by getting monthly cash advances to pay my bills with (and then of course paying the balance in full before interest is accrued)?

I know that's a hassle to be taking cash advances every month but I could easily rack up many many miles if it's feasible.

Thanks for any input.

-L

waltworks

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #1 on: January 14, 2015, 08:27:30 AM »
Close them if they have fees, or call to see if they'll waive/transfer to a different product with no annual fee while keeping your account active.

Then stay away from CCs for a year. When you're used to not using them, then you can start looking at rewards cards/churning/etc.

-W

After aggressively paying down our credit card debt since getting on board with MMM back in April, we are happily starting 2015 with zero credit card debt.  That's right .. credit card debt in April = 38K and now ... 000000000! Whew does that ever feel good!

My question is regarding the credit cards that I now currently hold.  I know that keeping them open is good for my credit rating because of the age of the credit line however I was hoping to take advantage of some of the great credit card rewards programs that I've been reading about on this site. 

So, do I keep my existing cards open (and pay the annual fee) even though I'm probably not going to be using them and may start using a new account and start accessing those reward programs?

Also, one of my oldest cards states that I will get 1 frequent flier mile for every dollar spend on eligible purchases and when I read the footnotes it stated that cash advances qualified.  Couldn't I rack up significant miles by getting monthly cash advances to pay my bills with (and then of course paying the balance in full before interest is accrued)?

I know that's a hassle to be taking cash advances every month but I could easily rack up many many miles if it's feasible.

Thanks for any input.

-L

MakingSenseofCents

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #2 on: January 14, 2015, 08:54:46 AM »
Do you need your credit score for anything in the near future? If not, I would definitely close the credit cards with the annual fees. The ding on your credit score most likely won't be too bad anyways, and can be recouped.

frugaliknowit

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #3 on: January 14, 2015, 08:58:36 AM »
Congratulations!!  Freagin AWESOME!!

Echo Lise E

Don't start churning/points strategies until you get more experience using credit cards safely.

takeahike

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #4 on: January 14, 2015, 08:59:26 AM »
I've never closed a no-fee credit card. It will eventually go inactive. Cut the cards up if you don't want to use them. Keeping the phantom cards oddly enough increases your credit score. I've still got every card inactive for about 20 years in my credit history. My credit score is +800 and has never been below +700.

DeltaBond

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #5 on: January 15, 2015, 06:44:07 AM »
I'll close the cards for stores that I don't plan on going to again... like Sam Ash music or something, but if its a general Visa type card, I wouldn't close it if there is no fee for just leaving it there.  Just don't lose track of your open credit lines.

panthalassa

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #6 on: January 15, 2015, 07:56:47 AM »
Also, one of my oldest cards states that I will get 1 frequent flier mile for every dollar spend on eligible purchases and when I read the footnotes it stated that cash advances qualified.  Couldn't I rack up significant miles by getting monthly cash advances to pay my bills with (and then of course paying the balance in full before interest is accrued)?

I know that's a hassle to be taking cash advances every month but I could easily rack up many many miles if it's feasible.

You will be charged interest immediately with cash advances (no grace period) and the APR will be much higher than simply using your credit card for purchases.  There may be transaction fees as well.

Read your agreement thoroughly.

Keep your oldest credit card, close the rest.

TerriM

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #7 on: January 15, 2015, 10:54:10 AM »
First of all, 38000 congratulations to you!  You have done an amazing job!!!!!

Second, ditto on the cash advances--don't do it.  Fees fees fees. 

You should decided whether you intend to pay cash for the next year or if you consider a credit card safe to have.  Given that you've paid off $38K, I think you'll be ok with a credit card, but that's for you to decide.

I would only ever hold one card that has an annual fee otherwise you're wasting your money.  I have a Southwest airlines card because that's what we fly (though I really should have a card for an airline that will take me to Hawaii instead :).  Then, I'd only keep that card if you intend to buy things on the credit card to maximize your return.  If you're only going to use cash here on out, no use paying for a credit card. 

I think you should keep at least one card for online purchases (airline tickets etc.). 

We have three (well four), credit cards:
1 main card (with annual fee) we take out of the house and use all the time
1 card solely for use on recurring internet purchases that I don't want to have to reenter should the house card get stolen
1 backup card for travel.
1 Kohl's card, because I buy clothes at Kohls and in theory you get more % off if you buy with their card.  I'd been putting off getting this for 5 years, because I do like having my wallet simplified.
« Last Edit: January 15, 2015, 11:45:39 AM by TerriM »

RunHappy

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #8 on: January 15, 2015, 11:09:09 AM »
If you still need to have a credit score then, no do not close them because that will mess up your length of credit history.

Catbert

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Re: Starting 2015 with no credit card debt .. do I close those cards now?
« Reply #9 on: January 15, 2015, 12:16:58 PM »
Definitely keep your oldest cc.  Probably cancel the others that have a yearly fee.  Maybe do it slowly as fee time comes up to ensure that your credit score doesn't drop a bunch.   Definitely cancel any store cards you may have.   

 Don't try the cash advance game.  As others have noted that money is not "free" by any means.