I guess I have one semi-good reason for not canceling all my credit cards just yet. We need a few more birthdays before my husband and I are 25. If we need to rent a car, we’ll need to have an actual credit card to do so.
The fine print on Budget.com:
“These locations will rent to individuals under 25 years of age with a valid, acceptable credit card (debit cards are not permitted) and surcharges and exceptions as indicated.”
I haven’t yet checked the details on other car rental sites.
I’m doing my best to enjoy the present, but it’ll be nice when I’m 25 and treated as a regular adult :).
I’m 30 and can’t rent a car without a credit card. The places that take debit cards can put a hold on your account of $2-3k; if there is a dispute, they can take your checking account hostage.
I’ve heard that it can reflect poorly on your credit if you cancel credit cards. Thoughts?
Yes, not having a credit card or canceling your cards can affect your credit score.
I’ll need to check into this some more, but I’ve also read that having several credit cards open with $0 balances can hurt you when trying to apply for a mortgage (I guess they think you’ll run out and charge a bunch of new furniture? Dunno).
I don’t want to have negative things on my credit report, but I’m not interested in using credit in the future. I don’t want to take out a car loan ever again, I don’t want to rely on my credit cards to pay for my living expenses, etc.
When we try to apply for a mortgage in a few years, there’s other ways they can explore your credit-worthyness (looking at your actual expenses, income, etc) rather than simply looking at your credit score, I believe.
One downside to not having a credit score (I think) is it could affect your car insurance payments. Also, some employers check your credit report before hiring you.
Credit is so complicated. The other day, I called American Express to close my account with them. The guy asked why, and I said, “I’m just trying to stick it to the man” hehe. Don’t think he’s heard that one before.
I agree. I would not cancel all the credit cards. You may have difficulty buying a house, renting a car, getting a hotel room, etc. without one. Some places do not accept debit cards, you may want to check around.
My husband and I don’t have a credit card. We ran into that when we went up to New England a year or two ago. We had to rent a car, but both of us were under 25, so we ended up having to pay a lot. Some companies DO take you, but it’s like twice the price - I think we ended up paying like $380 for a three day weekend, and they put $100 hold on our account. Yikes! I’m glad we’re both over 25 now. We’re going to need to rent a car for a trip in a couple of months and so we’ll see what the cost is.
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I’ve found that Enterprise is really good with renting cars to people between 21 and 25. I’ve rented from them and they certainly didn’t put a hold on my debit card for $2,000. I believe they told me it would be $500 (the final cost was $130), but it’s been a few months since the rental. There’s also no extra cost for being between 21 and 25 (at least not in Hawaii). I know some agencies do that, but Enterprise doesn’t.
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Kacie, you wrote:
<blockquote cite=”The other day, I called American Express to close my account with them. The guy asked why, and I said, ‘I’m just trying to stick it to the man’”
But, not relying on credit anymore, you are “the man.” So . . . you’re stickin’ it to yourself? :)
Congratulations on your road to financial peace. Yours is an inspiring road to see.
Cancelling all of your credits WILL affect (effect?) your credit negatively. One reason is the length of your credit history. If you have a credit card for 5 years and then you cancel it, you’re shortening your credit history. And that’s negative on your report. Also if you’ve only had a credit card for 5 years, you’re going to get negative points for not having ENOUGH credit. It’s completely stupid, but that’s how it works. I’d recommend this (which is what I did, and my credit score literally SHOT up): Cancelling everything but your oldest card. PLUS - I’ve had that card for 7 years now, and I STILL get told my credit score is low because of too little credit. Again - completely stupid, but that’s just the way it is.
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