How credit score is affected by closing credit cards

If you are trying to cut down on expenses and pay off your credit card debts you think that closing credit cards is a good way to get started as you will not be accumulating more credit. But closing your credit cards will have a negative impact on your credit score. How does this happen?

A key factor in determining the credit score of a person is the credit to debt ratio. A person who uses less than 30% of the credit available to him will get more points towards his credit score than a person who has used a higher percentage of the credit available to him. Therefore having more credit cards mean that you have more credit therefore lowering the percentage you spend.

Another factor affecting the credit score is the credit history. Longer the history the better it reflects on the credit score. Therefore closing the oldest credit card means you are closing a part of the credit history.

One needs to weigh the pros and cons of the above situations, if you have no control over your spending you are better off closing the card rather than accumulate more debt or continue paying high annual credit card fees.

Why Process Credit Cards Online

Many merchant process credit cards online so they can insure that they do not miss out on any business. By them doing this it makes more people want to buy their services or products due to the fact that credit cards seem to be the new cash. When trying to buy something online these days or even in the actually store it seems rather odd if the merchant does not accept credit cards because this is the way many people keep track of their cash this day in time.

A legit Merchant services provider will understand the need for them to accept credit cards. If they do not accept them they will miss out on a lot of money. It does not matter how low their rates may be if they do not have this method of payment available customers will pay a higher amount for a product simply because the merchant provides them with the total merchant services that they desire.

Over the years so many things have changed as far as to how things go when one is purchasing goods and services. Back when all these things first came into effect people would only accept cash because no one knew about bank atm cards and credit cards. However, now it seems that everyone has a credit card even if it is nothing more than a prepaid credit card. The sad fact of the matter is some children even have credit cards but their parents feel that it is a better way for them to manage their money so be it.