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You have five credit cards each with a $1,000 limit, making your total available credit $5,000. Your regular monthly credit card expenses total $1,000. Your credit utilization ratio is 20 percent ...
If an unused credit card has a high credit limit or a long-established credit history, closing it could negatively impact a cardholder's credit score. It is usually better to leave these cards open.
For example, owing $3,000 on a $10,000 credit limit is fine for your credit score. Closing a credit card with a $4,000 limit and then owing $3,000 on a total credit limit of $6,000 puts you at 50% ...
Credit Card 3: $1000 credit limit with no charges Across the three accounts, you have $3,000 in available credit and you have $500 in outstanding balances. Your utilization rate is almost 17% ...
Card 2: $1,000 balance / $3,000 credit limit. Card 3: $0 balance / $12,000 credit limit. You’ve borrowed $7,000 out of $25,000 in available credit, meaning your utilization ratio is 28%. If you ...
Let's say that you have one credit card with a $1,000 balance and a $4,000 limit, and another credit card with no balance and a $1,000 limit. Currently, you're using 20% of your available credit ...
If you were to close an unused credit card that has a $2,000 limit, your total available credit drops to $8,000, and your balance now represents 25% of your available credit.
Closing a credit card can also have a negative impact on your credit age. The longer you’ve owned and paid off your credit cards, the higher your age. 5 steps to cancel your credit card [Video]