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Do you have too many credit cards? Perhaps you are having trouble managing all of your open accounts, or are unable to pay the annual fees for all the cards that you have. If you’ve decided that you don’t need some of your credit card accounts, then you should carefully consider which are the best ones to close.

Here are a few factors to consider.

1. Which Cards Have the Highest Annual Fees?

If annual fees are one of the reasons that you’ve decided to close some credit card accounts, then it only makes sense to start with the ones that have the highest. But instead of just closing the most expensive cards, consider how much value the card offers to you compared to its annual fee. For example, an airline frequent flyer card with a $95 annual fee might offer you benefits such as free checked bags that are worth much more to you than another card with a $49 annual fee that has very little additional value. In that case, you might be better off canceling the card with the $49 fee and paying the $95 fee.

2. Which Cards Do You Use the Least?

Another thing to consider is the rarely used cards, but keep in mind all of the ways you might use the card, not just how often you make charges. Some cards might offer valuable benefits, like car rental insurance or roadside assistance, that you use on occasion, even though you rarely make charges.

3. Which Cards Have Rewards That Are Forfeited When the Account is Closed?

With some credit cards, your rewards can only be redeemed if your account is open and in good standing, so the last thing you would want to do is to close one of those cards before redeeming your points. However, if you gain points and miles through loyalty programs offered by airlines, hotels or other partners, you can usually keep them. 

4. Which Cards Offer the Best Customer Service?

Beyond the terms and conditions of a credit card, many customers value the relationship and customer service they have with their card issuers. If you’ve had trouble with your card issuer’s customer service, then you might not wish to keep the account. But likewise, if you’ve been impressed with your interactions with the card issuer, you may reconsider before deciding to close an account.

Alternatives to Closing an Account

Before you close a credit card account or consolidate your debt, there are some alternatives to keep in mind. First, if the card has no annual fee, you might wish to keep your account open and just place the card in a proverbial, or actual sock drawer. Doing so could help keep your debt-to-credit utilization ratio lower. This ratio is the total amount of credit you have been extended, divided by the sum of all of your balances. For best credit scoring results, experts generally recommend keeping the amount of debt you owe below at least 30% and ideally 10% of your total available credit limits. So, if you’re carrying high balances on your other credit cards, closing one with a high credit limit could wind up hurting your credit. (You can see where you currently stand in this category by viewing two of your credit scores, updated every 14 days, for free on Credit.com.) 

You can also give the card issuer an opportunity to retain your business before closing your card. For example, many card issuers will offer to waive the annual fee or to give you a one-time credit for additional rewards in order to keep you as a customer. Finally, many card issuers will offer you a no-fee version of a card before closing your account. A no-fee version will have fewer rewards and benefits than the similar card with with an annual fee, but it may be a better alternative for some cardholders.

Having a credit card account is not a lifelong commitment and it’s inevitable that customers will close their accounts one day. But take some time to consider all of these factors to help make the right decision.

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