Should You Close A Paid Off Credit Card Account?

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With the way employers and creditors use your credit rating to determine your worthiness to be employed or to be a trustworthy person, is it any wonder that when you finally get a credit card paid off that you don’t know if you should close the account or not?

It’s no secret that closing a credit card dings your credit score. However, supposedly there are ways to cancel a credit card without it hurting your score.

Still, it’s something that I’ve been wondering a lot about lately.

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I closed mine, but there are other opinions on this subject.

 

Before You Close A Credit Card

Here are some things to think about when it comes to closing a credit card:

  • If the issuer closed the account once you paid it off, ask them if they’ll update your account to show that the closure was voluntary.
  • Consider leaving it open and using it a couple of times a year for small purchases that you pay off right away. This will help to rebuild your credit.
  • If you find yourself being tempted to begin charging more than you can really afford, it may be in your best interest to either close the account, or if you want to keep it, to give it to your spouse if he or she has more willpower. Or, freeze it so it’s harder to get to.

Here are some things to think about if you’re choosing between a high credit score and being debt free.

 

Helpful Tips For Closing A Credit Card

 

How To Close A Credit Card Without Hurting Your Credit:

  • Start with the card that costs you the most.
  • Pay that balance in full.
  • Tell the card’s issuer about your intentions to close it.
  • Send them a letter of cancellation.
  • Dispose of the card.
  • Keep an eye on your credit report.

 

5 Reasons To Close A Credit Card:

  • If you’re breaking up.
  • You don’t want to pay the fees.
  • That credit card no longer makes sense.
  • That card has been used fraudulently.
  • You’re done with debt.

 

5 Credit Cards You Should Never Close:

  • One that still has a balance.
  • Your only credit card.
  • The only one you have with available credit.
  • Your oldest credit card.
  • The one with the best terms.

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