Think Twice Before Canceling Credit Cards

0:00Think twice before canceling that credit card. This is a money minute from in-charge education foundation and militarymoney.com. It's understandable for a person to want to close out a zero-balance credit card account. But the fact is that this can often hurt your credit score. Remember that lenders look at your credit to debt ratio, meaning that they are concerned not only with how much debt you have, but also how much credit you have available. If you consolidate several credit card balances onto one card and then close out the zero-balance accounts, they are no longer factored into your credit to debt ratio. The debt that was on them, however, still is. And this will wreak havoc on your FICO score. Leaving those zero accounts open, however, and having the discipline to keep them at a zero balance, will both boost your credit to debt ratio, and over time, will become a long-held positive credit history, which is something that lenders love. Everyone likes having a clean slate, but if you have unused credit accounts, particularly ones that have a positive payment history, you might think twice before closing them. This money minute is made possible by in-charge debt solutions. Visit us online at www.incharge.org