| If you have many Credit cards and are seriously | | | | supposing that it has a low APR. Now you have a |
| into credit card debt, chances are good that you | | | | total credit limit of $15000 and outstanding balance |
| must be thinking of getting rid of few credit | | | | of $8500 (providing the balance transfer doesn't |
| cards. The strange fact is that if you get rid of a | | | | increase the credit limits). With this step your |
| credit card without giving thought to the points | | | | outstanding balance to credit limit ratio goes up to |
| listed below, you could be shooting yourself in the | | | | 57%(rounded off). |
| foot. Yes, it could damage your credit history | | | | So, the net result is ending a credit card will |
| further. Here is how this happens. | | | | increase your debt to limit ratio which is not good |
| Assume that you have 3 credit cards with the | | | | for credit history. |
| following data | | | | Secondly, the age of credit card also matters |
| Card A: $2000 credit limit - $1000 Outstanding | | | | when it comes to determining credit history. The |
| Balance | | | | credit card that stays with you for longer than 6 |
| Card B: $5000 credit limit - $2500 Outstanding | | | | months is good to keep because credit rating |
| Balance | | | | agencies give a lot of weight of age of a credit |
| Card C: $10000 credit limit - $5000 Outstanding | | | | card. So, if you decide to end a credit card and it |
| Balance | | | | is an old one, give it a second thought. All the |
| With these credit cards the data that emerges is | | | | credit history associated with that credit card can |
| that you have a total credit limit of $17000 of | | | | be wiped out in an instant with this decision. |
| which you have an outstanding balance of $8500 | | | | The picture that emerges from the above facts |
| or 50%. The fact is that the percentage of your | | | | is that if you want to end a credit card make |
| outstanding balance to credit limit should be low. | | | | sure that your outstanding balance to credit limit |
| The credit rating agencies prefer it to be in the | | | | ratio remains or becomes low and doesn't |
| limits of around 30%. | | | | increase. Secondly, don't end a credit card which |
| Now suppose you decide to end your Credit Card | | | | has a good long record of credit history. |
| A and transfer all its balances to credit card B | | | | |