Guidelines for Closing a Credit Card
December 15, 2011
2 minute read
3 guidelines that will help you know when canceling a credit card will barely affect your credit score and when it can do some damage.
Danny P. asks: I have 5 credit cards with zero balances and a total of $7,500 available credit. I just use one card and pay it off in full every month. One of the other cards has a low $200 credit limit. Would it be a good idea to cancel it?
Whether it’s smart to close a credit card or not is a common question because many people know that it can hurt your credit score. But we also want to lighten our load and ditch the cards we don’t use. Here are 3 guidelines that will help you know when canceling a credit card will barely affect your credit score and when it can do some damage:
- What is the credit limit of the card?
When it comes to lines of credit and credit cards, the amount you owe for all your accounts compared to your total credit limit is very important. The wider the spread, the better. Read More »