mastercard or visa?

[Kanchou]

opening new credit cards lowers your score.

Closing cards in good standing does not.


www.myfico.com

[Mad iX]

Originally Posted by Kanchou

opening new credit cards lowers your score.

Closing cards in good standing does not.

That's the case here.

I have both as well. Most of the time I use VISA. No particular reason. I still keep the Mastercard as the interest rate is low and there's no annual fee.
I pay mine off every month anyway so interest rate isn't a big deal for me. I only use mine for convenience, not to spend money I don't have.

[medic]

Originally Posted by Kanchou

opening new credit cards lowers your score.

Closing cards in good standing does not.


www.myfico.com

true, the inquiry to your credit when you apply for a new account hurts your score a bit.
however, closing the account can lower your score if it means that your credit history becomes much shorter. Say you've had the VISA for 10 years and then decide to open a Mastercard and close the VISA. Suddenly, your history went from 10 years to 1 year which drops your score.

Additionally, part of your score is calculated by the amount of credit you use relative to the credit you have availible. So let's say your Mastercard has a $5000 limit and you use $4000 of that. That's worse than if you had used $4000, but had split that evenly amongst two credit cards that had $5000 limits each. It doesn't matter that you pay off your creidt cards each month and don't carry a balance. Your credit card company reports your balance at some point in the month to the credit agencies - all they see is the amount on your card at that time...they don't see that you pay it off when they calculate your credit score.

I've started paying my CCs weekly instead of waiting til the end of the month and taking advantage of the float. It's a pain paying off a few 1000 every week especially when that week's expense report hasn't processed, but it's in an effort to keep my credit score up until the house is done and the morgage rate has been locked in.

http://www.bankrate.com/brm/news/cre...20040128a2.asp


I'd just hang onto the VISA even if you don't plan on using it. The open line is a pain I know, but it's all a game to make sure your score doesn't get hurt. Of course, if you don't plan on making any big purchases then you may be fine since your score will recover over time, but I wouldn't risk it.

If you really want a Mastercard instead of the VISA, check with your current credit card company and see if they can just switch your product. A lot of times if the company offers both brands of cards, they will switch you and keep your same account open. That way you can get your Mastercard and not hurt your score.