The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Perhaps you finally got yourself out of credit card debt — congratulations, by the way. Or maybe you’re simply running out of room in your wallet for the stack of plastic you have. No matter what the reason, if you’re considering closing a credit card account, consider this first:
“In most of the cases we see, there isn’t any real need for the consumer to close the account,” Thomas Nitzsche, media relations manager for ClearPoint Credit Counseling Solutions, said in an email.
However, if you decide this is the right move for you, it’s important to carefully select which one to close.
“If they are closing a card simply because they genuinely have too many, I would close the newest one with the shortest payment history or the one with an annual fee,” Nitzsche said.
Nitzsche said closing a card with an annual fee is right when “you have plenty of revolving credit … and the creditor is not willing to waive the fee” or when “you are no longer using the reward program enough to justify the cost.”
He also reminds consumers to first redeem any unused points or rewards on a card, as they are lost when the card is closed.
If your cards are all about equal — meaning, you have no annual fees and they are all about the same age — Nitzsche advises closing one with “the lowest credit limit, the worst rewards program (or if it doesn’t offer rewards) or if it has a very high interest rate that the creditor is not willing to reduce.”
Nitzsche also recommends that consumers who close a credit card “request that the creditor mark the account ‘closed by consumer’ rather than ‘closed by creditor’ just so it looks better when their credit is manually reviewed for future credit.”
It’s important to note that closing a credit card, even if you feel you have a good reason, can hurt your credit because doing so will lower your overall credit limit and can potentially reduce your mix of accounts and impact your age of credit history. (You can find out where your credit currently stands by viewing two of your free credit scores, updated every 14 days, on Credit.com.)
Image: IPGGutenbergUKLtd
April 9, 2024
Credit Cards
October 21, 2020
Credit Cards
August 3, 2020
Credit Cards