Cutting Up Credit Cards Isn’t Always the Best Solution for Atlanta Cardholders
Believe it or not, owing zero dollars on your credit card bill isn't always a good thing.
With Atlanta consumers getting the message that too much debt is dangerous, many folks are leaving some of their cards in their wallet, cutting up credit cards with scissors - or even canceling their accounts, according to Atlanta bankruptcy attorneys.
It's a move in the right direction. But unfortunately, it's a move that can backfire.
See, when you close an account, you lose any credit you had on that account - meaning your overall credit availability takes a nosedive. Why is that bad? Because the amount of debt you're carrying stays the same. By canceling your account, you automatically increase your debt-to-credit ratio. And that makes you more of a credit risk - and decreases your chances of receiving a loan.
Let's say you don't close your account, you just stop using your card. Nothing wrong with that, right? Unfortunately your bank might beg to differ. Banks are getting fed up with unused accounts since they cost money to maintain but don't bring any money in - and they're starting to clean house by increasingly canceling inactive cards.
So what options do you have left? How about using your account - but carefully. If you use the card in question for several regular charges every month - for instance, to pay your cable or utilities bill - it can be a win-win. You know you have to pay off your balance to make your bills, so you won't be increasing debt. At the same time, you get to maintain your credit - and even improve it, if you make all your payments on time.
Caring for your credit is a balance. You have to use it so you don't lose it. But if you use it too much, you can get into trouble. Fortunately, there's a way to restore that balance - bankruptcy. If you've erred on the side of too much debt, bankruptcy can help you pay it off at your own pace - and protect your assets in the process. Find out for free if bankruptcy can help you restore your credit when you try a complimentary personal debt analysis with a professional bankruptcy attorney in Atlanta.