Three Reasons to Close Your Credit Card
Many people ask about closing a credit card. We’ve all heard that it can cause problems with your credit and credit scores. Below are some tips for deciding if the time is right to close your account.
- Are you using the card at all? The reality is, leaving a credit card open when you are not using it can be almost as dangerous and closing the card. Someone with ill intent could get their hands on it and use it to fleece you of your money. Or, the credit card company may close the card due to inactivity.
- Do you plan on making a major purchase in the next year or two? This doesn’t mean some new clothes or a new drill. We are talking about something like a home or a car. If you are not, now may be a great time to close that account.
- Do you have other credit cards that are open and in use? If so, those cards are aging and adding positive information to report. Over time they can take the place of the card you are closing. A long positive history, is a good history.
As with everything credit related, this is just a snapshot of when it might be time to close an account. You can always learn more by talking to a credit counselor or visiting our blog.
Published May 15, 2014.