Nissan 370Z Forum - View Single Post

polarity · 10-01-2009, 01:14 PM

Quote:

Originally Posted by kannibul

Closing the account and continuing to pay it off, doesn't hurt it...at least as I understand it. Plus it locks the interest rate. As far as maintaining a credit score, if the end result is that you want all your debts paid off, and pretty mcuh go to a cash-only method, then it doesn't matter.

That said, we closed both of our credit cards before I bought the Z, and was able to secure a 5.8% APR, without hitting a credit union. I was able to get 6.25% APR through my regular bank.

Lastly, there are two types of credit. Loan Credit, and Revolving Credit.

Revolving Credit is what credit card companies look at for a history of making payments on time for an open-ended loan. This is what affects your APR and credit limits most initially, well, that and your debt/income ratio.

Loan credit is for car financing, bank loans, and mortgages - anything with a set end-date. This is for determining APR or approval for a given loan, and what they'll loan you for, as well as your debt/income ratio.

Now, if I tried to open a credit card RIGHT NOW, I'd probably get a craptastic offer, but, since my intended goal is to NOT HAVE a credit card, I'm well on my way.

Thanks for all the information, my wife is always better about the spending than I am honestly. So this is something she will understand fully. I do agree that the idea would be to go cash and get away from credit, but for me I think keeping good credit will be mandatory even if my goal is to be credit free. I learned long ago that just because you don't have the money for something doesn't mean you won't need it. You always need to be able to deal with unexpected financial emergencies, if that's from savings that's great, but if not your credit needs to be good enough to get a loan with an interest rate that isn't going to throw your entire financial plan out the window.

Just a thought.

-William