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Credit scores is a matter of financial concern now a days.People are in a rat race to improve credit scores. In other words, to improve credit scores,its maintenance plays a major role. Almost 68 years ago,the concept of Credit card established. Diners club introduced the first ever credit card in the world. However, the credit for that particular launch goes to Mr. Frank McNamara in United States. However, the main usage of Initial credit cards were to pay restaurant bills only. After several decades, in other words, in 2019 , millions of customers are comfortable with credit cards. What more, several companies nowadays provide several offers for its customers and it has become a lucrative business. In conclusion,Credit scores are very much depended on credit cards’ usage.

Current scenario of credit cards

According to the latest status quo, Visa Leads with more than 350 million card holders followed by MasterCard. Chase and American Express cards decorates the consecutive positions. Citibank comes next with around 50 million card holders in United States’ financial scenario. An average annual fee of a credit card may come around $400. It also charges an extra of $75 annually for each additional card. Hence, issuance of credit cards depends much on the improved credit scores.

Credit score aspects

As far as United States of America is concerned, an improved credit scores represents the credit worthiness of a person. Therefore the calculations are based on the possibility of credit repayment by the consumer. Banks as well as credit card companies diligently scrutinize credit scores. This assesses the amount of potential risk involved in lending money and the repayment. Between a score of 300 to 850, credit score above 700 is considered as good credit score. For instance,Credit score of most of the Americans fall between 650 and 700. Financial companies and money lenders, including credit card companies evaluate and take decisions on the issuance of credit card. Above all,issuance of card is very much based on the credit score of that particular customer.

Other factors

United States’ financial sector has witnessed major credit card debts with huge difference in credit scores and balances. Similarly, credit cards can make a huge impact on the credit scores of user. Almost all of the people, both working class as well as business people, carry credit cards in United States. Likewise,the scenario is similar in any other well developed countries. Another fact is that we are now fed up with pile of cards inside our wallet adding new cards. These cards belongs to a new company or a new card of the existing bank.

Up gradations of Credit cards

When you upgrade from old credit cards with less or rather zero offers and benefits to that which carry tons of offers, you might be tempted to close your old credit cards. This usually people do to close down the deal. Almost all of us do the same procedures and closes that particular credit card. Finally, the question is “is putting a credit card open or closed more beneficial for a customer?”. It is a truth that credit scores and credit cards have a direct relation.

How are Credit Cards Related to Credit Scores?

Owning a credit card is a ‘double edged sword’ as far as credit scores are concerned. Everything is built on your approach towards your usage of those cards. Credible and strict utilization and correct payment increases your credit scores to the sky. Proper usage with a ‘responsible financial mind’ is what every financial institutions expects from its customers. Any financial transactions that you have carried out in your life will affect the credit scores. This includes excellent credit card operations, prompt loan repayment, zero check bouncing cases. All these factors are definitely going to affect your credit score in a positive way.

Contradictions

However, in contradiction to the above mentioned situation there is one truth. The fact is payment faults regarding your credit card will pull down your credit scores to the floor. Inappropriate use of credit cards is known as financial indecency. Check bouncing history and repayment faults on loans can influence your credit scores in a very negative manner. At this juncture, it is highly significant to discuss regarding your credit card status even if you are not using.

Some experts opine that closing your old credit card will adversely affect your credit score. instead you should maintain your old credit cards open.

(1.) Our available credit will contract while we close a credit card . It in turn will badly affect our credit utilization ratio. If the credit available for your utilization is more, it can pull down the credit utilization ratio.This is one method to make your credit scores soar.

.(2)  Another factor that will determine the ‘strength’ of the credit card is the longevity of its usage. A lengthened credit card history means good credit scores.

(3) Last but not least.use checks wisely.

Keeping your card open will provide improved credit scores.

What are the Benefits of Keeping Former Credit Cards Open?

Old credit cards if kept open can positively influence your credit cards in two ways. It can pull up the length of credit history and credit utilization rate. If your credit history consists of nearly 15% of your credit score, proper usage of your credit cards will contribute positively to that credit account. So manage your credit card promptly as much as and as long as you can. As far as credit utilization is concerned it is comprised of approximately 30% of your credit score. It has a major role to play in your credit score.

How to calculate your credit score ?

For instance, if you own two cards and suppose the total credit limit is $ 20,000 and collective statement balance for these mentioned cue cards is $ 4000. Your credit utilization ratio is – 4000/20000 which is equal to 20%. In short, if your are closing one promptly using credit card, you are pulling down your credit ceiling. A rule of thumb should be applied to utilize less than 30% of your available credit. In turn, this will improve your credit score.

Additional Suggestions for Improving Your Credit Score:

Initially, discontinue making new purchases on your old credit card.

 Remit the balance amount accrued on that credit card and

make the balance zero.

 Talk with the banking authorities who have issued the credit

card and ask for a waive off of the annual fee.

 Finally, renew your old credit card number with new card number

from online purchasing sites.

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