If you have ever had a problem with using a credit card, you will notice that more than one card is usually involved. The average situation is always more and more cards until you can't repay the debt you owe. Sounds familiar?
Disciplinary staff trying to repay credit card debt would want to cut their cards instead of using their cards. What better way to ensure that new debt will not be created when solving old problems? Apart from that, this is a good thing because it marks a milestone in your debt removal work, and it is satisfactory to say the least.
In addition to destroying this card, some people will go all out to cancel the card. Now, this is where most people are unaware that they may be doing more harm than good. Much more. why? In any case, what's the difference when you don't plan to use the card?
It's safe to say that when you're struggling to pay off debt, you're also working hard to increase your credit score. Canceling a credit card will be reflected in your credit history even after it is cleared. To understand this, you need to understand how credit ratings work.
A large part of the credit rating depends on the amount of credit you dispose of and your debt. If you have 3 cards with a limit of $3,000 each, your credit limit is $9000. We assume that you have used $7,000 for this device. This is 80% of credit.
Well, next month, you manage to get $3,000 and you clear your debt on the card. Your credit has now fallen below 50% ($4,000 in the $9,000 facility). If you like, please celebrate and cut your card. Cutting your card can also prevent you from using it to create more debt again.
But at this point, if you cancel your credit card, your percentage of credit usage will jump back to nearly 70% ($4,000 for a $4000 device). See different? When you cancel your credit card, you will lose your credit limit and affect your credit rating.
Dealing with debt and money can absorb your energy and make you lose, especially when you are not familiar with how money works.
However, if you finally understand the concept and begin to use it, this situation can be reversed. At this point, access to your financial status and debt enables you to improve this situation. For example, using the information in this article, you can repair your credit score without paying more than you have already paid.
[ad_2]
Orignal From: Why You Should Not Cancel Your Credit Card
No comments:
Post a Comment