While it may seem logical that you should close some of the old credit cards you no longer use, the opposite is true. One of the factors that determine your credit score is your length of credit history. If you close an old credit card, your credit history becomes much shorter, which can affect your score.
Additionally, closing a credit card reduces your available credit, which is another criterion used to calculate your score. Having less available credit will increase your credit utilization rate.
For example, if you have an old credit card with a $5,000 limit and a new card with a $2,000 limit, your total available credit is $7,000. If you have a $1,000 balance on the new card, your credit utilization rate is roughly 14 percent. However, if you close the old credit card, your rate will shoot up to 50 percent.
If you pay your credit card bills on time, have a decent credit score, and…
Walmart is known for "everyday low prices" and its famous "Rollback" discounts. But there are…
Smart shoppers know that comparing prices to find the best deal can pay off. However,…
If you want to save money on your food expenses, you’re better off preparing meals…
Twenty-four percent of those aged 65 and over live in families that depend on Social…
Summer is finally here and there are plenty of discounts and deals for you to…