How To Close Credit Card Properly?

Contributed by mm | October 22, 2006 10:09 PM PST

It is not always wise to close your credit card accounts, and when you decide to do so, you should do in a proper fashion. Here are some good tips:

From WSJ:

Don't close old card accounts. Even if you don't use a credit card that you've had for ages, consider keeping it open. Closing an older account will hurt your credit score, because your credit history will appear shorter than it actually is. Consider calling the card issuer to see if you can get a better rate, and cancel an account you've opened more recently.

Don't cancel many card accounts at once. If you want to pay down debt, gradually pay off each card and close each account as you do. Lenders like to see how you manage a number of accounts, and a sudden drop in card use may result in a sharp drop in your credit score.

Consolidate wisely. Rolling all your debt on to one card may sound smart, but if your account balance comes to more than 50% of your available credit line, it'll dent your credit score.

What do you think of this post? Be the first to share your opinions.

Enjoy the latest personal finance news and commentary at PFBlog Network.

Similar Posts

OptionXpress Offers Affiliated Credit Card (October 27, 2006)
As reported by CardWeb, OptionXpress and Chase are launching a new cash reward card. At 1% cashback, the offer is not impressive at all. (And it is no different from the 1% cashback ShareBuilder card.)

American Express Launches Event Ticket Protection Plan (October 27, 2006)
Interesting creation from American Express. It is unlikely one will use it, but it is always good to have the piece of mind.

Kiplinger: Best Credit Card Choice In Every Category (October 20, 2006)
Kiplinger's Personal Finance put together some interesting card choices for every purpose you can think of (cashback, low-rate, travel rewards, gas reward, etc.). Of course, it is important you make up your mind and stick to one or two programs to maximize your credit card ...

How Corporate Credit Card Can Hurt Your Credit Score (October 20, 2006)
WSJ reminds us that if you are late paying a company credit card bill, or the company is late to reimburse you by paying to the card on your behalf, you are still on the hook for a creditworthiness downgrade.

Read More ... All Other Posts In The Same Category

02/26/07 | New Capital One Credit Card with 1.25% Cash Back | (1)

01/31/07 | When It Is OK To Use Credit Card To Pay Off Home Equity Loan | (82)

01/09/07 | How To Negotiate A Lower Credit Card Rate

01/02/07 | 2007 Credit Card Trends | (1)

11/15/06 | Featured Card: Citi Driver's Edge Platinum Select Card

10/27/06 | OptionXpress Offers Affiliated Credit Card

10/27/06 | American Express Launches Event Ticket Protection Plan

10/20/06 | Kiplinger: Best Credit Card Choice In Every Category

10/20/06 | How Corporate Credit Card Can Hurt Your Credit Score

10/14/06 | How Many Credit Cards Should You Have?

10/11/06 | Credit FAQ: Who Can Look at Your Credit Report?