Paying down or paying off credit cards is obviously great; but cancelling them is another matter. When you cancel a credit card, or other account, the “history” becomes closed and is no longer used to calculate your FICO if it was positive; the negative still remains on the credit report however; also; you have then reduced your available credit which means you still have too much “used” credit vs. “unused” credit and this ratio is also an important factor in credit scoring.

I would let them sit providing:

  1. you aren’t paying outrageous fees to have the card open;
  2. if you can hold off from using the cards;

Once you have several accounts paid off; then consider closing the one with the highest annual fees or highest interest rates so it impacts your FICO score the least.


i have a question about credit cards, paying them off, canceling them, and increasing credit score.

i did a balance transfer on a credit card. so i am confused is it better to keep the credit card w a zero balance (cut up in the safe box) or to cancel if since it is paid off? which way is better to the credit reports and fico score?

thanks in advance.. i know that this is the place to find out the correct answers.. you guys are great! keep up the excellent work!


When I receive a call from someone claiming to be a collection agency, I write down the information they are claiming I owe. Then I ask them to send it to me in the mail. This simple act alone eliminates a lot of scammers. They do not want to risk sending something via US Postal service because that can trace back to them and add Mail Fraud to their charges.

To add something that was already said, the cc company does not have to inform you, but whoever bought it can also resell it. We have one debt that we have been disputing the amount for almost 5 years. The cell phone company wrote it off and there is now a 3 company trying to collect. I have sent certified letters to the cell phone company and to the first collector explaining that we are willing to pay what we owe, but that amounts to less than 50% of what they claim we owe.

From my experience, those people will tell you anything if they think they can intimidate you into paying. They buy charged off accounts from credit card companies in hopes of reaping $$, though it will not improve your credit report.

Maybe next time you could ask them to hold while you press the “record” button, or even perhaps a call back number (direct to the agent calling) so that your lawyer can call them to “negotiate.” I’d bet they’d leave you alone for a long time.

You need to read up on the Fair Credit Act (or some such). I believe that before they can do anything they must write you their reasons and their requirements (requests) of you and then you must be given something like 30-90 days to respond/contest it.

Good afternoon,

I am in need of some counseling and was look for some help,

I was out of work for 14 months and just recently (the past 6 weeks) employed. 12 months ago, I was paying monthly minimums on my “Next” credit card. I received a call from a collection agency demanding the entire balance. I told them that I could not pay the whole balance and they wanted to give me a 40% discount to be paid ASAP. These phone calls kept coming in spite of the fact that the NEXT bank was out of business and I told them that I could not pay.

I live in South Florida and explained that I had damage on my house from the hurricanes and they left me alone.

I received a call from the same collection agency this past week again demanding payment. This call came out of the blue and almost a year to the day of the last one. They called to re-introduce themselves and to say that that they are faxing a letter to me with terms of $1100 a month to be paid until the balance is paid off. They also stated that I am in several banking violations and they can start proceedings against me as soon as Wednesday if I do not comply.

This is a fairly simplistic view of my situation but I sure would appreciate some words of advice.

Thank you,

You can send a letter (certified return receipt) to the collection agency instructing them to ONLY communicate with you in writing. I think a sample letter, along with a listing of your rights as a debtor) or posted on the group web site. You can also check them out at the Better Business Bureau online. Hope that helps!

I wouldn’t mind talking/negotiating with the right party. I am concerned, however, that I cannot be sure who it is that is really on the other end, whether phone or mail. If my credit card company has written off the account and sold it to a third party, shouldn’t they let me know who it is?

As far as I understand it, the CC company doesn’t have to tell you but when I contacted the CC company about collectors who contacted me, the CC would tell me who they sold the account to. I then contacted the BBB then sent the certified letters. I am working with a DMP and they were also able to verify the legitimacy of the collection agencies and work out payment plans with them.

I’m new to the blog and have several questions, however, I’d like to start with my concerns regarding illegitimate collection calls and letters. As we live in a time of overt identity and information theft, I suspect that there are people who would use this information to extort money from unwitting debtors. As they are not legitimate, they would not care what the collection laws actually are, but would use intimidation and threats that legitimate collectors are forbidden to use.

I am also concerned of phishing operations that would try and get information from us in order to do the above collection scam. In addition, it is relatively easy to make a call with a fake (spoof) Caller Id number that looks like it is from Citibank, Chase, American Express or the IRS. All of this combined has me somewhat perplexed as to how to respond to the creditor calls I receive.

So far, I ignore them. I don’t think this will work in the long run.

Any shared concern or enlightenment would be appreciated.