The credit card dilemma. Should we close credit cards that we do not need anymore, we just do not want to pay the credit card fees anymore, or maybe we want to get a better credit card. Before you do this, you need to stop. Closing a credit card that you have had for a long period of time can actually hurt you credit score.

How can canceling a credit card hurt your credit. First by closing a credit card you would be affecting the amount of credit you have available. One of the things that can affect your credit score is you credit ratio. This would be called, your credit utilization ratio. As a rule of thumb, we need to keep your utilization at about 10% to get the biggest increase in your credit score. If creditors see that your utilization goes up, they feel that this would be a sign of risk when offering credit to an individual.

Another reason not to cancel a credit card is because, it affects the over all age of you credit history. Your credit score is effected by your length of credit history, the loner you have the better your score will be.

If you decide to close the account anyway, do not worry as long as you continue to make payment on your other cards your credit score should go backup in a matter of 2 to 3 months, once creditors see that you are continuing to be able to make payments on time.

What would be some good reasons to close a credit card?

  1. Not enough benefits that you can use
  2. Interest rate is too high
  3. trying to upgrade to a better card

What are some reasons not to close a credit card.

  1. Not being used
  2. It is your oldest card
  3. You only have a couple of cards.


Last if you do decide to cancel your credit card, do it the right way.

  1. Call the company up and ask for paperwork confirming the cancelation.
  2. If you have any rewards use them up first.
  3. Pay off card before you cancel it.

A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!