Should I Close My Credit Card Account?

More credit Q&A: “Should I close my credit card account?”

I wanted to address this issue because there are a lot of people out there that make it seem like you should never close credit card accounts.

Unfortunately, this seems to benefit the credit card issuers more than consumers; after all, if we can’t close our credit card accounts, there’s a decent chance we may use the cards in the future and run into trouble.

Let’s get real for a minute here; if you don’t use a certain credit card and you’ve got numerous open accounts with positive credit history on them, it’s okay to ditch a credit card or two.

In fact, I recently closed two credit card accounts that I hadn’t used in a year, as I had about six other active credit cards.

Sure, my available credit will drop, as those lines of credit are no longer at my disposal, and my credit utilization rate will rise as well, but it’s nothing substantial.

You see, I’ve got plenty of good history on my other credit cards and I keep balances low to nil, so it’s not a concern for me.

And hey, even if I hadn’t closed those credit accounts, they may have closed anyways by the card issuers themselves.

Chase actually closed one of my card accounts without notifying me, presumably for complete inactivity for several years.

Now let’s look at the other side of the coin; if you don’t have much credit history or you’re in the process of or planning to apply for a loan, it’s best not to tinker with your credit card accounts.

Closing a credit card account can lower your credit score for reasons I mentioned above, so it’s best not to mess with it during crucial times like applying for a mortgage or auto loan.

It’s also not advisable to close a credit card account if you’ve only got one or two, as you may need those accounts to build positive credit history, or heck, buy lunch.

Similarly, if you have credit cards with years of history, it’s probably best to keep them open and active, and close newer, less valuable accounts with little payment history.

Your credit score can actually take a hit if you’ve got too many credit cards, so if you think that might describe your situation, and you’re interested in closing one or two, start with the ones with the least history, or perhaps the ones with the most negative information (how to cancel a credit card).

Related Topics:

1. Don’t Close Credit Card Accounts While Building Credit
2. It’s Okay To Cancel Your Credit Card
3. Let Us Cancel Our Credit Cards Without Fear
4. Watch Out for Credit Card Inactivity Fees
5. American Express Paying Customers to Close Their Accounts