Purse Unused

Purse Unused

Unused Credit Cards - Close 'em Or Keep 'em?

If you are like many consumers, the number of credit cards in your wallet (or purse, or nightstand drawer!) has been steadily growing over the years. In fact, myfico.com reports that the average consumer now has nine credit cards in his or her name.

With the seemingly endless stream of enticing card offers, from 0% financing to generous rewards on your purchases, it became very easy to accumulate a stack of plastic. But many of us now possess a number of credit cards that are not being used at all. And while you may be tempted to close out these accounts, you may not want to cut up your plastic just yet.

While some believe that having a large unused credit line could hurt their ability to get a new loan in the future, in reality the opposite is usually true. When you close an unused credit card, you can negatively impact some of the factors used to calculate your credit score. These include:

• Credit card utilization: Your overall credit card utilization (your total balances divided by your total credit lines) will increase when you close an unused card, as the card you are closing will effectively have its credit line reduced to 0. And higher credit card utilization may hurt your credit score, especially if your resulting utilization starts to exceed 30% to 40% of your total credit lines. The impact can be particularly dramatic if your remaining open credit card accounts have little or no available credit.
• "Thickness" of your credit file: If you have very few loans or credit cards, closing your credit card can result in a credit score that is based on too few relationships, which can limit your availability to credit in the future. Multiple credit relationships, even those that are not being utilized, will tend to help your credit score.

In addition, with credit markets tightening, you are probably seeing fewer credit card solicitations in your mailbox. For this reason, it may be wise to hold on to an unused card so that you don't find yourself without an available credit line in the event of an emergency.

Despite this, there are still some valid reasons to close an account that you are no longer using:

• To reduce the chance of identity theft: Many people do not actively keep track of the cards they no longer use. If an unused card (or card number) is stolen, you may not realize it until someone has used it to steal your identity. It is important to know what cards you currently have, and to not ignore any correspondence you receive regarding these accounts.
• Self control: If you believe that you will tempted to use the card to purchase items that you can't afford, then you should close your account. While there are a number of good reasons to keep an account open, it will not be worth it if you are going to use the card to increase your debt.
• Annual fees: You should not keep any unused card that requires an annual fee.

Incidentally, if you find a credit card that you haven't used for some time, you may wonder if it is still an open, usable account. Periodically credit card companies will close out credit card accounts that have been inactive for an extended period of time, but this practice differs from company to company. An excellent way to see what credit cards you have and whether they are open or closed is to request a copy of your credit report from one of the three national credit bureaus.

About the Author

Dave Kearns is a credit and marketing professional with over 20 years of industry experience. He is a co-founder and contributor to the website CreditGumbo.com, and an international credit card consultant.

I am returning on item on eBay. Should I contact eBay or PayPal?

I bought a purse on eBay and when it came in two days ago it was a fake. I contacted the seller and simply said that I was unhappy with the item and wished to return it. No tags have been removed and it is unused. The seller said she would return the money. I further requested a return address which I am waiting on... but are there any precautions I need to take with eBay or PayPal before just mailing it back? I will get a tracking number on my package but is that all I need to do? Also, what is an RMA number and do I need to ask the seller for one of those?

If you made all contact thru ebay then you have proof you contacted seller. I would open a item not as described dispute. If the item is a fake then the seller should reimburse you for return shipping. Make sure you get delivery confirmation and include a note in package with your ebay user id and item number.RMA is is a transaction whereby the recipient of a product arranges to return goods to the supplier to have the product repaired or replaced or in order to receive a refund or credit for another product from the same retailer or corporation within the product's warranty period. I doubt you need one. Just get the mailing address to return.

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