March 2010 April 2010 May 2010 June 2010 July 2010
August 2010
September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 April 2013 May 2013 June 2013 July 2013 August 2013 September 2013 October 2013 November 2013 December 2013 January 2014 February 2014 March 2014 April 2014 May 2014 June 2014 July 2014 August 2014 September 2014 October 2014 November 2014 December 2014 January 2015 February 2015 March 2015 April 2015 May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 November 2015 December 2015 January 2016 February 2016 March 2016 April 2016 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018 November 2018 December 2018 January 2019 February 2019 March 2019 April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 October 2019 November 2019 December 2019 January 2020 February 2020 March 2020 April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 2021 April 2021 May 2021 June 2021 July 2021 August 2021 September 2021 October 2021 November 2021 December 2021 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 August 2022 September 2022 October 2022 November 2022 December 2022 January 2023 February 2023 March 2023 April 2023 May 2023 June 2023 July 2023 August 2023 September 2023 October 2023 November 2023 December 2023 January 2024 February 2024 March 2024 April 2024 May 2024 June 2024 July 2024 August 2024 September 2024 October 2024 November 2024 December 2024 January 2025 February 2025
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
20
21
22
23
24
25
26
27
28
News Every Day |

Does Closing a Credit Card Affect Your Credit Score?

If you’re thinking about closing a credit card you haven’t used for years, you might want to reconsider. Closing a credit card can actually lower your credit score by potentially reducing the length of your credit history, especially if you’ve had the account for a long time. It can also affect your credit utilization ratio by reducing the amount of available credit you have access to.

In this post, we’ll go over how closing a credit card can hurt your credit score and how you can decide if closing the account is in your best interest. Let’s break it down further.

In This Piece:

How Does Closing a Credit Card Hurt Your Credit Score?

Your credit score is made up of several factors, and closing a card can change these enough to harm your score. Here’s a breakdown of how credit scores are often calculated:

  • Length of credit history (15%) 
  • Credit utilization rate (30%)
  • Credit mix (10%)
  • Payment history (35%)
  • New inquiries (10%)

Length of Credit History Decreases

Your length of credit history is an average of all of the ages of all of your current—which means open and active—accounts. If you close one of your credit cards, it usually decreases this average age.

Credit Utilization Rate Increases

The amount of revolving credit card limit you are currently using is called your revolving utilization. Let’s say you have a credit card with a $10,000 limit and a $2,000 balance. You are utilizing 20% of your credit line.

To maximize your credit scores, you’ll want your revolving utilization to be as low as possible, with 10% or lower being ideal for most people.

An open credit line with a roomy limit and zero balance will help lower your revolving utilization, especially when you carry balances on other accounts. But closing an empty card takes away some of that open limit. This will raise your credit utilization rate; if the change is enough, it could significantly lower your credit score.

Payment History Decreases

Your payment history makes up 35% of your credit score, and when you close an old credit card, the history of the payments made to that card disappears from your credit report. This can cause your score to drop by several points. While you can boost your score back up, improving your payment history takes time. 

By leaving your old credit card open, even if you only use it for small purchases once a month, you’ll preserve that positive payment history, which can help you improve a lower credit score and maintain a good credit score.

Credit Mix and New Inquiries Changes

In general, the better your credit mix, the better your credit score. If you only have one revolving account and you close that card, you’ve changed your credit mix considerably. This can hurt your score.

It’s also common for people to close a credit card only to find that they need one or want another one down the line. This means you’ll have to open up a new card, which will trigger a hard credit inquiry. That hard inquiry can cause your score to drop by as much as 10 points.

How to Cancel a Credit Card

Once you decide that the hit to your credit scores is worth it—let’s say you have a joint credit card account with your spouse, but you’re divorcing—there are a few steps you’ll want to take to close your old card:

  1. Pay off the balance. Before you close the card, you’ll need to pay off what you owe on the card. If you can, pay it off in one lump sum. This will help you close the account faster. If you can’t afford to pay off everything you’ve charged, pay down what you can as fast as possible until you repay the card in full.
  2. Confirm the balance. Contact the credit card issuer and make sure that there are no pending transactions that could cause the card to stay open. They’ll be able to review everything on the account and ensure that the balance is at $0.
  3. Notify your credit card issuer that you want to close the account. Let your credit card issuer know that you want to close the account. You may be able to do this over the phone, but sending an email or physical letter to the issuer is helpful so everything is documented in writing.
  4. Get confirmation of the closure. Contact the credit card issuer and request confirmation that the account is closed. Try to get the confirmation in writing and keep a copy of the email or letter for your records.

The exact process you’ll need to follow to cancel your credit card may vary depending on your credit card issuer. Contact their customer service line to learn about the steps you’ll need to take.

Closing a Credit Card FAQ

Is It Better to Cancel Unused Credit Cards or Keep Them?

In most cases, it’s better to just keep the card and not use it instead of canceling it. This assumes you’re not using it and can manage it responsibly. However, you’ll also want to factor in any annual fees the card charges. If you find that the fees are more than it’s worth to keep the card open, you may be able to negotiate with the company instead of canceling the card.

What Happens to Your Credit When You Close a Card?

When you close the card, your credit score might take a hit. How much it goes down depends on which of the credit factors it affected and by how much. Credit reporting agencies will be alerted of any closed accounts within a month, but the positive effects of the account can last for 10 years.

Is It Bad to Have a Lot of Credit Cards With Zero Balance?

It can be bad. Credit card issuers tend to report activity on actively used cards, even if they’re only used every few months or for very small purchases. If you have several cards with zero balances and haven’t used them for years, the credit card issuer may close the account due to inactivity. 

They may also stop reporting activity to the credit bureaus. This can effectively shorten the length of your credit history and may cause your credit utilization ratio to increase.

Is It Bad to Cancel a Credit Card?

It’s not necessarily bad to cancel a credit card. If you no longer want a joint credit card with your partner or worry about your ability to monitor transactions, canceling one can be a good choice. But if you can leave your cards open and active, doing so can keep your credit score higher.

Monitor Your Other Lines of Credit

Additionally, you should be responsible for your remaining lines of credit and focus on using them without affecting your credit utilization rate. By keeping those accounts open and using your credit cards at least once a month, you can build your credit or at least negate any potential score decreases that might come from canceling a card.

Keep an eye on your Credit Report Card that lets you know where your credit stands.

The post Does Closing a Credit Card Affect Your Credit Score? appeared first on Credit.com.

Москва

Энергетик или яд: что известно о загадочной смерти двух свердловских футболистов

Asian flag carrier to launch more flights from the UK this summer to bucket list destinations

What Two Hosts of 'SNL' Committed Murder? 'SNL50' Joke Explained

Prem star’s brother hasn’t paid penny towards our daughter despite living in six-bed £2.9m mansion, says his furious ex

How Man Utd could line up in the CHAMPIONSHIP with top stars sold as Rio Ferdinand fears they won’t win another game

Ria.city






Read also

Little-known iPhone hack instantly frees up storage – I’d never seen it before and saved 90GB of space in seconds

Celebrity MasterChef: Major fight between Nikki Tamboli and Tejasswi Prakash in blind fold challenge; Usha Nadkarni gets irritated with Dipika Kakar

Exact date Aldi’s brand new anti-ageing skincare range that ‘maintains youthful skin’ hits middle aisles for just £4.99

News, articles, comments, with a minute-by-minute update, now on Today24.pro

News Every Day

Asian flag carrier to launch more flights from the UK this summer to bucket list destinations

Today24.pro — latest news 24/7. You can add your news instantly now — here


News Every Day

Don't let AI phantom hackers drain your bank account



Sports today


Новости тенниса
Евгений Кафельников

Кафельников призвал теннисистов бойкотировать матчи с Синнером



Спорт в России и мире
Москва

Турниры по хоккею и карате состоятся в Нагорном районе



All sports news today





Sports in Russia today

Москва

Налоговый вычет за сдачу нормативов ГТО можно получить в 2025 году


Новости России

Game News

Аниме-RPG Now Here: Match 3 Defense стала доступна на Android


Russian.city



Губернаторы России
Елена Волкова

Учимся с умом: не дайте ИИ задурить вам голову


Медики со всей России спасают жизни пациентов вопреки всему в новом цикле проекта «Врачи» на ТВ-3

В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»

В Московском регионе почти 9 тысяч самозанятых формируют будущую пенсию самостоятельно

Песков: В Кремле будут внимательно следить за общими «оборонными планами» ЕС


«Как она жива в принципе»: Тимати воссоединился со своей юношеской любовью

«Когда кончится это пиарство?» — Волочкова «наехала» на жену экс-супруга

В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»

В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»


Паула Бадоса разгромила Мертенс во втором круге турнира WTA-1000 в Дубае

“Курникова в инвалидном кресле больше не нужна?”, – поклонники Иглесиаса нашли ему новую пассию

Теннисист Бублик высмеял решение по допинг-делу первой ракетки мира

Кафельников призвал теннисистов бойкотировать матчи с Синнером



В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»

5,8 тыс. семей Московского региона направлены выплаты из материнского капитала

В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»

В Екатеринбурге наградили юных звезд на благотворительном фестивале «Добрая волна»


Состоялась окружная конференция СРО НОПРИЗ, зарегистрированных на территории Дальневосточного федерального округа

Безнаказанность Алиева и азербайджанских олигархов России: Москва вновь оплачивает бакинские счета

Учимся с умом: не дайте ИИ задурить вам голову

Собянин: Открыли участок улицы Ивана Франко от Житомирской до улицы Герасима Курина


Мину времен войны, найденную бобрами в Новой Москве, увезли с места происшествия

Сочи вошел в тройку городов для отдыха на 23 февраля

Диалог в Эр-Рияде: Россия и США укрепляют взаимопонимание на переговорах

Депутат Михкельсон: Москва добилась важной победы на Мюнхенской конференции



Путин в России и мире






Персональные новости Russian.city
Джиган

Рэпер Джиган показал, что просыпается в обнимку с домашней козой



News Every Day

Don't let AI phantom hackers drain your bank account




Friends of Today24

Музыкальные новости

Персональные новости