04/27/2008Will it look bad if I take out a new credit card and cancel it after a year?
- I am thinking of getting a new credit card, with rewards (like the Hilton HHH honors card, or similar). Many of these have perks like a ton of bonus points to start, so I was thinking of getting one of these cards and using it for a year. After the year, I was going to cancel it to avoid fees (alot of them have no fee for the 1st year, but then fees afterwards).
Will my credit score be negatively affected if I do this? If so, I will probably not sign up for a new one. My credit score is already good so I don't want to damage it unnecessarily. Thanks
- Best Answer:No. My dad has a perfect credit score. He does this all the time. He signs up for 0% for a year cards and transfers balances to it and then cancels it after the deal is up. It's smart! What is damaging is having too much open credit. Cancelling doesn't damage.
- Answer:Opening new credit will definitely temporarily lower your credit score. The greater your present score the more it will affect it. The good news is that after a couple of months and paying on time it will gradually increase. With good credit you should be able to secure a card with no annual fees. I would speak to a representative and ask if they can waive that fee.
Also, I would keep the card open and just use it on items that you would get any way and pay the balance. One of the factors of keeping good credit is having revolving credit like credit cards and having those credit lines for a long period of time.
- Answer:It is to your credit advantage to keep older credit cards open, as it shows credit responsibility, but I can understand your reluctance to pay a fee. Can you get these benefits on a card that doesn't tack on a fee if you do a little more research?
- Answer:Remember to cancel it in time. I didn't cancel mine in time and was slammed with a $75 annual fee. :-(
- Answer:First off, if you don't have a lot of other credit cards, yes by all means get it, but don't just get this cards just because of it perks, only to disgard it after a year because of the annual fees, this will bring your credit scores down if you close this account. And turn around and do that again why. The whole purpose is to have good credit, not to play with credit.
You want to do or use strategic moves when handling and dealing with credit. If you already have good credit and want another card because of it's features, you will have to make a choice if it is worth it, and then decide if this decision will hurt or help you.