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Old 06-10-2012, 05:17 PM
 
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the credit card company offers a payment arrangement that significantly reduces monthly payments and APR for 1 year, and after that it's back to normal payments and APR, BUT the card closes permanently. Does this negatively impact a persons credit score, if so for how long? The Balance on the card is around $6k. APR is 29.9 currently.

Lets say you've never missed payments or had late payments with this particular credit card company.

and you have other credit cards that are still open that you're continuing to pay off with no missed payments aswell. And you have a GOOD credit score already
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Old 06-10-2012, 05:32 PM
 
Location: southwestern PA
20,419 posts, read 38,728,951 times
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It will drop.

How much and for how long depends on too many variables....

To me, closing a card with 29.9% APR is a no-brainer.
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Old 06-10-2012, 05:35 PM
 
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Is it a significant drop? What if you have other credit cards that you have had open for a long time just like the one you're closing. But you're keeping the rest of them open. And what variables does it depend on?
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Old 06-10-2012, 05:48 PM
 
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One factor in your credit score is the average length of time accounts have been open. If closing the card means your average length of time accounts has been open would drop, then your credit score would go down a little. Another factor is the total amount on your cards vs your available. For that you want to stay less than 30% otherwise your credit score can drop. I do not know the answer to your question about agreeing to a lower amount.
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Old 06-10-2012, 06:40 PM
 
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Quote:
Originally Posted by md21722 View Post
One factor in your credit score is the average length of time accounts have been open. If closing the card means your average length of time accounts has been open would drop, then your credit score would go down a little. Another factor is the total amount on your cards vs your available. For that you want to stay less than 30% otherwise your credit score can drop. I do not know the answer to your question about agreeing to a lower amount.
the balance is actually over the limit by a hundred or so. But we'll be paying it off once its closed, thats the only way the cc company do the arrangement is if its closed they told me.

Does it still go down a little? will i have trouble buying a car with money down like a month or so later? The card is in my dads name so only his credit will suffer? My mom has excellent credit but earns less so we can use her credit?
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Old 06-10-2012, 08:31 PM
 
Location: 23.7 million to 162 million miles North of Venus
5,571 posts, read 5,276,284 times
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It won't hurt the average age of accounts since the history of the card will continue to report and to be factored in the scores. It will hurt utilization though since the credit limit will no longer be a factor in the scores.

Another thing that will hurt is carrying a balance on a closed account. That will hurt until the card is paid in full. If there is one or more late payments on that or another card then the late payment(s) will remain 7 years from the date of the late. The late(s) will hurt more at first but lessen over the years.

If this is on your dads card, and only his credit would be affected, why would you think that you'd have trouble a month or so down the road in purchasing a car? Is he supposed to be a co-signer on the car?
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Old 06-10-2012, 08:47 PM
 
Location: Sierra Vista, AZ
16,191 posts, read 21,208,417 times
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Quote:
Originally Posted by Pitt Chick View Post
It will drop.

How much and for how long depends on too many variables....

To me, closing a card with 29.9% APR is a no-brainer.
Another gift the Supreme Koch gave us, Usury rates like that used to be illegal. The legal limit in Arizona was 10%
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Old 06-11-2012, 01:12 AM
 
5 posts, read 20,482 times
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Quote:
Originally Posted by berdee View Post
It won't hurt the average age of accounts since the history of the card will continue to report and to be factored in the scores. It will hurt utilization though since the credit limit will no longer be a factor in the scores.

Another thing that will hurt is carrying a balance on a closed account. That will hurt until the card is paid in full. If there is one or more late payments on that or another card then the late payment(s) will remain 7 years from the date of the late. The late(s) will hurt more at first but lessen over the years.

If this is on your dads card, and only his credit would be affected, why would you think that you'd have trouble a month or so down the road in purchasing a car? Is he supposed to be a co-signer on the car?
You mean if we make a late payment on a different credit card other than the one thats closed, it will remain for 7 years?? I understand if we do it on the one thats closed but for others too?

well yes my parents are the only ones that will co sign, I dont have any credit.
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Old 06-11-2012, 03:13 AM
 
Location: 23.7 million to 162 million miles North of Venus
5,571 posts, read 5,276,284 times
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Quote:
Originally Posted by lurker245 View Post
You mean if we make a late payment on a different credit card other than the one thats closed, it will remain for 7 years?? I understand if we do it on the one thats closed but for others too?

well yes my parents are the only ones that will co sign, I dont have any credit.
Late payments on any type of credit will remain on credit reports for 7 years.

If you have no credit, and that's the only reason why you need a cosigner, then there is one option that you might try, if either or both of your parents have credit cards that are in good standing, no lates, low utilization, fairly long history, etc., then you might ask them to add you as an authorized user (not a joint user) to a few of their cards. When/if they begin reporting then you might check your credit scores. It may bump you up to where you don't even need a cosigner, or, enough that if your mom is a cosigner her lesser income won't be that much of a problem.

If you do that and after you get your car loan then you should start building your own credit card portfolio so you won't be dependent on being an AU on your parents cards, if you should ever find that you need to be removed from one or more of their accounts.
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