Closing Credit Card Accounts: What You Don’t Know Can Hurt You
How to Properly Close Credit Card Accounts
It’s important to understand that you should never have more credit card accounts than you can handle. Because of this, you might find yourself in the situation of having to close a credit card account at one time or another. However, just closing your credit card accounts at random just won’t do. There are some things you should know first.
Reasons for Closing Credit Card Accounts
There are a number of reasons why you might want to close your credit card accounts. Having fewer credit cards will help you keep better track of them. Having fewer credit cards also helps improve your credit by keeping your credit report cleaner and lowering the amount of your revolving credit.
Which Accounts to Close
When closing your credit card accounts, you obviously don’t want to close the account of a credit card you use all of the time. However, you do want to make sure that you close your idle accounts that you don’t use.
You’ll also want to close any accounts that you no longer use but that you have balances on. This will help you pay off the balances without adding debt to the credit card.
Which Accounts Not to Close
Don’t close credit card accounts that you use regularly. Keep credit cards that offer low interest rates and no annual fees. This will save you money, but you need to make sure that you use the cards that you leave open responsibly.
Make sure that you don’t close all of your credit card accounts. You want to keep several of them open to ensure that the relationships with these creditors is contributing to a healthy, positive credit history.
Check Your Credit Report
Once you have closed your credit card accounts, you’re going to want to check your credit report to make sure that the accounts you’ve closed have been marked as closed. Examine your credit report carefully and make sure that all of your information is accurate. Taking these steps will ensure that your credit rating is at its best.