Opting out of Credit Cards?

Is opting out of credit cards really a good idea. One of the new credit card laws of 2010 is that consumers have the right to cancel their credit cards if they don’t like the offer they recieve. If they choose to close the account they have 5 years to pay off the existing balance at the interest rate they had when the account closed.

There are problems with opting out that consumers should be aware of before they close accounts. When you close accounts your score can drop up to 60 points. The higher the score the more the score drops. Another problem is if the account was old and it is closed it will eventually be deleted off the credit report. When this happens the score could drop dramatically. Old credit is a treasure to the credit score. Creditors have the right to delete accounts after inactivity of 2 years. Many Creditors do not follow through on deleting inactive accounts since it cost them money each time they update the credit profile. The last point is if you close your account and have financial problems in the future you will not have access to those funds. If you start making late payments on other accounts you will not be approved for a new credit card at a time where you may need that credit to survive. My advice is to pay the account off and leave it open. If you want to use it in the future at least you know it is there.

“Great credit brings great opportunity”