Don't Screw Yourself. The Do's and Dont's of Closing Credit Card Accounts.

Don't Screw Yourself. The Do's and Dont's of closing Credit Card Accounts.

Closing old and unused credit accounts can help you avoid unnecessary fees and guard against identity theft. I am guilty of having done this. Usually out of anger. It feels good at the moment telling your financial institution to go fly a kite. However, it can and usually does DROP (did for me) your credit score if you aren't careful.

Here are a few Do's and Don'ts and Don'ts and Don'ts for closing those dormant accounts:

DO… Consider closing unused cards that are costing you money. If your card has an extraordinarily high interest rate or an abundance of fees, and your provider isn't willing to lower your rate or waive some fees, you may want to consider closing the card - especially if you don't use it. If you don't use it and the accounts zeroed out, it may still be beneficial for you to pay the annual fee and bite the bullet, especially if you have had the card for more than 7 years.

DO... Be aware that you can usually cancel accounts that have an active balance by asking your creditor to close the account to new charges while you continue to pay down the balance each month. This may be a good way for heavy credit users to prevent new spending while they are reducing their balances. However, watch out for additional fees. Yeah, some banks will charge you for closing it out without an outstanding balance. Be sure to ask first. And always ask to speak with a supervisor. They might (certainly can) waive those fees.

 

Do… Aim to keep some accounts open. This is generally recommended to keep your credit score and debt balances healthy. Signs of active and responsible credit use are viewed positively by creditors. It shows HISTORY. They like to see 7 PLUS YEARS of it too.

 

Do… Always check your credit report for updates and errors after you close accounts. You should generally wait 30 to 60 days for the creditor and credit bureaus to update your records. While the accounts and their payment histories may stay on your report for seven or more years, the status should be updated to reflect that they are closed. You would be surprised how many errors I have found on my credit report. You have to dispute them!! And if you want to learn how, I can show you. And it's FREE to do so.

    DO ABSOLUTELY NOT!!!

    Don't, DO ABSOLUTELY NOT... Close the oldest account on your credit reports. This could cause your credit history to appear shorter, which may (and will) harm your credit score. Don't do it. No bueno.

    Don't... Just throw away old cards and expect your accounts to close automatically. The safest way to close an account is to send a certified letter to the customer service department of the creditor. Typically, you should receive an account closing confirmation letter in 10 days. Be a BIG BOY and OPEN YOUR MAIL.

    Don't… Be BULLIED to cancel several accounts all at once. Tighten your belt and grit your teeth. If you want to cancel numerous credit accounts, spacing the closures over time could reduce the chance of attracting negative suspicion from potential creditors. They're sneaky lonely bastards.

    Don't over-consolidate balances onto one card. A good rule of thumb is to keep your credit balances under 30 percent of your available limits if possible. If it's one of those 0% interest for 18 months offers, think about it if you believe it will help you manage your debt!

      Look, debt is good. Credit card debt, not really. But we use them. Be Responsible So You Don;t Get Screwed.

      If you have any more questions, hit me up with a comment.

      Five Things That Factor Into Comps!

      Five things that factor into comps!

      You may think that sale price is the only factor when you're looking at comps and trying to set a price for your listing. But it's actually a bit more complicated. Here are five things that affect comps that you might not be aware of.

      1. New construction nearby: Because of low prices for lots and varying prices in home building materials, new homes can actually be cheaper and cost less per square foot than existing homes. If there's a lot of new construction nearby, that can affect the price for your own listing.
      2. Renovations: Recently renovated homes typically sell for more than homes that haven't been updated in a while. If you've recently upgraded your home-especially sought-after upgrades like the kitchen or master bath-your home should be priced appropriately.
      3. Developable lots: Not all lots are created equal. Even if the square acreage is the same, a lot that's easily developable will get a better price than a hilly or rocky lot that needs a lot of preparation.
      4. Listing price vs. sale price: Whether sellers actually get their asking price depends greatly on the market. When you're pricing your home, it's important to look at sales prices, not just listing prices. The listing price doesn't always accurately reflect what a home will sell for.
      5. Location: Nearby amenities, safety, schools, and noise levels can vary greatly within a neighborhood. Homes in more desirable parts of the neighborhood will sell for a higher price, all else being equal.

      How do Home Owner's Associations (HOA) work?

      How do Home Owner's Associations work?

      When you purchase a home, there's a good chance you'll have to pay a homeowners association fee, especially in gated communities, townhouses, condominiums, and other similar planned neighborhoods. The idea is to keep common areas clean and maintained, and there's usually an HOA board that is responsible for setting the rules and regulations.

      Each HOA is different, but most have the same core elements. You'll typically pay your HOA fees either monthly or annually, and it's an important factor to consider when you're weighing your options for a new home. So what is typically included in your HOA fees?

      First, the fun stuff Amenities are typically the big perk of living in a community with an HOA. While you lose out on some of the freedom of living without an HOA, you instead get community amenities like a maintained pool, gym, clubhouse, tennis courts, and other amenities. The HOA fees pay for cleaning and maintenance, so-in theory-you'll always have a clean pool whenever you want to use it.

      Protecting the community HOA fees often contribute to insurance for the community amenities, as well as a fund for unexpected repairs to damaged community property-think damage from weather or accidents.

      General maintenance Your HOA fees will go toward maintaining the general safety and upkeep of the community. This means things like elevator maintenance for condominiums, snow removal, and trash/recycling services.

      Be active in the association There may be a board of directors, but homeowners associations exist for the betterment of the entire community, and every voice matters. HOA meetings-and the amenities they support-provide great opportunities to meet your neighbors and make your community a better place.

      Feel free to contact me directly with any questions!

      amjr@andymartinezjr.com

      c: 310-597-2089