Toyota Credit Card Question

Since you already have the card I would suggest not canceling it or letting it be canceled due to non use. That would impact negatively on your credit score.

Best thing to do is ask for an increase in your credit limit, get it as high as you can. Then use the card one time for a small purchase once every 6 months. The high credit limit will help your credit score and the once/6 months charge will keep the card from being canceled.

Even if you never plan to borrow money having a good credit score is important. For example, in my state it is used to determine insurance rates on your house, cars, etc.

 

Don't know about Toyota credit card, but I have a Lexus credit card (1.5% rebate points). If they are similar (which I don't know for sure), you can ask for a VISA debit card by redeeming the points. Last time I got a $1000 VISA debit card.
If this works for your Toyota credit card as well, then, this is a better way since you can use the VISA debit card almost everywhere.

P.S. I don't even have a Lexus.

 

Few people will always remember to use the card only once every 6 months. Better off at least putting a small recurring monthly bill on it.
Unless you plan on doing buying or refinancing a home loan in less than a year and have borderline credit at the edge off falling into a lower tier, a consumer closing a credit account isn't going to affect their FICO enough to make any difference in their life. So what if you have 791 FICO instead of 801? If you know you won't be applying for important credit such as a home loan in less than a year, really, so what if you have even a 700 score?

 

You are correct 790 vice 800, no difference, or even 750 vs 800. But a 700 could possibly mean a higher interest rate, I understand some lenders lower the rates if you are above 720 or even 740. I don't know how much closing a credit account effects the credit score and I suspect all 3 credit bureaus use different formulas and no one seems to know what they are. I also have been unable to find out what numerical score my insurance company uses to determine the best rate, but they will tell you if you are getting it or not.

I only have 4 credit cars and one of those I only use two times a year, June and December. I have heard some people speculate that you can keep an account active by carrying a small positive balance, say a dollar or two?

I depend a lot on Clark Howard a very knowledgeable consumer advocate who has saved me a lot of money over the years:
Dangers of closing credit card accounts after they're paid off on clarkhoward.com

Here is a site with the opposite point of view:
Ask WealthyReader – Should I Close Unused Credit Card Accounts - Wealthy Reader

So I guess there is no hard and fast rule, most "experts" seem to think if it is an old account or has a high credit limit it is good to keep open (I realize the OP is asking about a new account). But of course there is some risk and the more accounts you have the more risk.

 

If you have any risk at all to drop to a 700 score or lower by closing a credit card account, you have marginal credit or worse.

It also depends on the individual circumstance. Some people can actually raise their credit score or the credit approval likelihood for new credit if they close one account that was causing them to have "too much" available credit.

 

acre, your situation is why I don't have any manufacturer's card. They have too many restrictions & seem to be a PITA to redeem. Shell's MasterCard applies last month's earned rebate to this month's bill automatically.

 

This is NOT true. Cancelled card does not affect credit rating and the history related with that credit card (well paid or not) stays up to 10 years depending on states

 

Thank you, apparently the consensus is that my answer was incorrect. out: I accept that, probably won't be the last time I'm wrong either.

 

Just a call to Equifax and other credit agencies will confirm this if you have any doubt.

While we are at it, you should get a FREE copy of your credit report at least once a year (usually by filling a form and fax it or send it by mail). You wont be able to see your FICO score (only to banks (creditors) or if you pay online, but at least you get to check all your credit history and error that could affect your credit...

Theses company are obligated by the law to send you for free the basic report.

Its easy to mixup 2 John Smith and get a bad credit for someone else..

 

To tell you truth don't even use it! I have just had enough with them and paid it off and cut it apart! The worst credit card company I've ever dealt with!

 

I've recently found that on those voice systems where they tell you what questions you can ask, usually not the one you want to ask, if you say, "Talk to a human", it will connect you directly to a customer service rep.