Get tips about closing a credit card and whether it can hurt you.
Don’t Cancel a Card with Lengthy Credit History
Another issue to consider before you cancel a credit card is how long you’ve had it. Your credit history is the third most important factor in the calculation of your credit score. Canceling a long-standing credit card shortens your history, which could be an additional injury to your credit score.
Don’t Cancel Your Only Credit Card
The last reason I’ll give you not to cancel a credit card is that you need a healthy mix of credit accounts. As I mentioned, that makes up 10% of your credit score. If you cancel your only credit card, that would leave you deficient in the revolving credit category.
Weigh the Credit Card Pros and Cons
It’s important that you weigh the pros and cons of canceling a credit card for yourself. I certainly discourage you from having a credit card if you wouldn’t use it wisely. If you can tuck it away and use it only for emergencies, that’s great. But if the temptation to use it would still be there, one solution is to keep the account open for the sake of your credit score, but to shred the card.
For more Money Girl advice regarding credit scores, check out these episodes and tips:
- How to Raise Your Credit Score Fast
- An Easy Way to Build Your Credit Score
- Where to Get Your Credit Score
- What Affects Your Credit Score the Most?
- Don't Let Inquiries Lower Your Credit Score
I’m glad you’re listening. Chi-Ching, that's all for now, courtesy of Money Girl, your guide to a richer life.
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