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Oprah:
If you have the money. And take your friends.

Suze:
And, Jeffrey, you should stop eating out. You have credit card debt. Stop eating out, Jeffrey. You cannot afford it. Sorry.

Oprah:
Sorry.

Suze:
But it's true.

Jeffrey:
Where am I supposed to take my daughter, then?

Suze:
To your restaurant.

Jeffrey:
She lives an hour away.

Suze:
Oh, please.

Oprah:
Okay. Thank you, Jeffrey. Thank you.

Suze:
Wait, wait, I just have to say something. That's the point what he just said. "Well, what am I supposed to take—where am I supposed to take my daughter?" Make her food. Go to her house and sit down with her and have a conversation one on one with her and bring her something from your restaurant. Why do we always have to go out to do something?

Oprah:
Well, Jeffrey could make her some because obviously—

Suze:
Yes, that's my point.

Oprah:
One of the five things from the menu. One of the five things from the menu. Thank you, Jeffrey. That was very interesting.

Suze:
And I am sorry, restaurant industry, but it is the truth.

Oprah:
Okay. That is the Suze Orman way. Truth.

Suze:
It is the truth. It's we—and that's what this whole thing is about right now. All of us being honest with what can we spend—

Oprah:
Haven't we been saying that? That this is in our faces for a big reason. Somebody said yesterday, Elizabeth Lesser said when we had a financial question and she was saying, tonight obviously we were going to be talking about it in detail, but that we've been in a trance, America. We've been in a trance.

Suze:
Yeah. And even the government's been in a trance.

Oprah:
Yeah.

Suze:
The banks have been in a trance. The mortgage industry was in a trance. The real estate industry was in a trance. And look at what's happening. People are living in their cars. And you know what? They're writing me is the they're afraid that the car dealers are going to find out where they're parking because they're going to repossess their home, which is now their car.

Oprah:
Wow.

Suze:
And that's what it's come down to. It's like we've lost America, Oprah. It's very sad. Now, we have hope coming.

Oprah:
Yeah.

Suze:
In just five days.

Oprah:
Yes.

Suze:
We have hope coming.

Oprah:
Yes.

Suze:
But it's going to take years to turn this around. And it's got to start with being honest with yourself.

Oprah:
So last week Suze talked about credit cards. How to pay them off. And how credit card debt affects your FICO store. We have several folks on Skype tonight with specific questions about that. So first up, Danielle, hi there. You're on Skype from Vancouver? Danielle?

Danielle:
Hi, Oprah. Hi, Suze.

Oprah:
Hi, hi, hi.

Danielle:
Hi. Happy Best Life Week.

Oprah:
Happy Best Life Week to you. And your question for Suze?

Danielle:
My question is regards to credit cards, and I have two credit cards right now that are airline point cards and I pay $120 annually to keep these cards. I've never carried an annual balance ever, and I've had both of these cards for about eight years. Now, I do want to cancel one but Suze told me that I should not cancel it because it will hurt my FICO score. Now, knowing that I want to buy a house in the next couple years, is it worth me paying $120 for the next couple years to keep this card open so that I have a good credit history?

Suze:
So let's be clear. You currently don't carry any balances on any of your credit cards. Is that correct?

Danielle:
Correct.

Suze:
Correct. If you have absolutely no debt whatsoever, then it will not hurt your FICO score if you cancel that card. If, on the other hand, you're out there and you are watching right now and you happen to have credit card debt that you carry on your cards, then you should not cancel a card because that will hurt your FICO score. So I can explain that to you very quickly right now. But for you, Danielle, for $120 a year, are you kidding? You cancel that card. That is a lot of money. You could go out to eat at Jerry's (sic) restaurant for that. But that's besides the point. But let me tell you why, all right? Thirty-five—or 30 percent of your FICO score is made up of something called your debt, what you owe, to your credit limit ratio. The credit limit that all these credit cards give you. So, Oprah, let's say she has five cards. Or let's say you have five cards, everybody. Each with a $2,000 credit limit. That's a $10,000 credit limit. If all you owe is $2,000 on this one card, and let's just say you did, $2,000 debt to $10,000 credit limit is a 20 percent debt to credit limit ratio. That's fine for your FICO score. However, if you close down these four cards, you would owe $2,000, you have a $2,000 credit limit, that's 100 percent debt to credit limit ratio. Down goes your FICO score. So since Danielle doesn't owe any debt on any of these cards.

Oprah:
Which is a beautiful thing.

Suze:
Even if she closes it down, she still has a 0 percent debt to credit limit ratio, so it won't hurt her. Do all of you understand what I just said? So for your case, Danielle, get rid of that thing right now.

Oprah:
Gotcha.

Danielle:
Okay, thank you.

Oprah:
Thank you. Thank you, Danielle. Kimberline—that's great.

Suze:
That's how that works.

Oprah:
Kimberline is traveling for business and joins us on Skype from her hotel room in Dallas. Your question, Kimberline?

Kimberline:
Hi, Oprah. Hi, Suze.

Oprah:
Hi.

Kimberline:
I am concerned with a letter that I received from one of my creditors stating that my account is about to be closed due to no activity. And what I want to know is, will that affect my FICO score?

Suze:
All right. So, did you hear what I just said? The question is, do you carry any debt on any of your credit cards that you do not pay in full at the end of the month?

Kimberline:
There are two credit cards that have balances.

Suze:
All right. So that's—that's a yes. That's a yes.

Kimberline:
Okay.

Suze:
You know, and so how much debt do you carry?

Kimberline:
It's under $1,000. Maybe $800.

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