To Close or Not To Close?

Jeremy over at Generation X discussed whether or not one should close a credit card account in his recent post If You’re Going to Consolidate Then You Have to Stop Using Credit.

Since we’ve been looking into refinancing our home, and rolling in the credit card debt, this post says many of the things which I’ve been thinking and worrying about.

Jeremy discusses in the third paragraph To Close or Not to Close, some ways to determine if it’s a good or bad idea to close a credit card account. He suggests you look at the length of time you’ve had the card, and the credit limit. Reading Jeremy’s article really helped to pull my thoughts together.

When I ran my credit report and score from Equifax the other day, I noticed my Debt to Credit Ratio was listed.

Credit Report

I’ve been mulling over the results in my head for the last few days.  I’m hoping to see my credit score rise in the next month since it will be over twelve months since I applied for the credit cards last September.

But then I started thinking about the credit card companies in the past year that have closed my accounts without consulting me.  And that $20,000 line of credit. It’s with Wells Fargo and they already decided to lower my line of credit on my other account from $5,000 down to $2,000 and then they decided to take it away from me.  What if they decide to take away my $20,000 line of credit? That’s going to affect my Debt to Credit Ratio.

And our son, AJ is currently working part time, but is hoping to be hired full time.  He’s thinking about buying his own car, if the offer comes through. Mr. A would like for us to help him do that, but we can’t do anything right now, like co-signing for a loan and taking on more debt.

My Pathfinder broke down on me a couple of days ago and I had to get towed home.  Thank goodness for AAA.  The part on the radiator where you connect the hose that goes to the engine had disintegrated so the hose couldn’t be reconnected. Mr. A found me a new radiator for $137. I was telling a coworker what had happened, that I’d broken down right after I got on the freeway (I was getting on and knew there was a problem because I smelled antifreeze), and she asked me when was I going to buy a new car.  Well, if I were going to get a new car, it wouldn’t be brand new, and I wouldn’t be able to do it right now anyway.

Everything needs to be on hold for now until we get the house refinanced; banks don’t need to be canceling any of my accounts, and I don’t need to sign on for any more debt.

Anyway, I appreciated Jeremy’s article and thought he made a lot of great points.

Still mulling over money,

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2 comments to To Close or Not To Close?

  • Your debt to credit ratio looks pretty good. Your overall debt payments are low according to your chart, including the mortgage. Way to go!

    Last month, Chase closed my husband’s credit card account before notifying us. We were really irked, since we are trying to build up our credit scores. It lowers his overall amount of available credit.

    I hate when credit card companies do that. Hopefully that 2010 bill will ease those types of actions.

    -Little House

    [Reply]

    Mrs. Accountability Reply:

    Hey thanks! I guess I was looking at the overall debt to credit ratio. It certainly is annoying when the banks do us “favors” like that. :-p Thanks for visiting and commenting, Little House! 🙂

    [Reply]

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