I have a credit card that I don’t use very often and have been thinking about cancelling the account. Is this a good move?

Friday, November 18th, 2011

If you are considering terminating a line of credit, firstly make sure that there are no outstanding debts on your card. If your balance is greater than zero, keep the account open until you pay it off in its entirety. Do not contact your cards issuer about closing the account until the balance is paid down, otherwise you run the risk of them increasing your interest rate. Some credit card companies will make a point of raising your interest rate to the maximum amount allowed as a penalty if you try to close the account with a balance still outstanding.

Keep in mind that if you intend to apply for a car loan or mortgage in the immediate future, you would be better off leaving your credit card account open to better your chances of qualifying for a prime rate. This is because credit scoring agencies examine a consumer’s debt-to-credit ratio when determining their score. The more available credit you have as compared to the amount of debt you are carrying, the higher your score will be. This is why, if you anticipate that you will be shopping around for a home or a car soon, the best move may be to not cancel any credit card accounts just yet.

Otherwise, if you feel sure about closing your account, contact your card issuer. Most credit card companies will allow you to cancel an account over the telephone. Prepare yourself for the customer service representative to attempt to talk you out of terminating the line of credit. You may be offered deals and incentives to keep the account open, such as the waiver of an annual fee or a card upgrade. If you are determined to shut down the account, politely decline their offers and ask your issuer to inform the credit bureaus that your account was “closed at customer’s request” so that your credit report will accurately reflect everything. Jot down the name of the representative you spoke to, and the date and time of day. Keep this along with the written confirmation of the account’s closure that the issuer will send to you in the mail. This way, should a problem ever arise at a later date, you have proof that the account was closed.

Latest Other Card Guides

How I Ended My Toxic Relationship With Credit Cards February 27th, 2016

Do you know the signs of a toxic relationship? You feel out of control, just not yourself anymore.
Continue »

What You Need to Know About EMV Chip Credit Cards October 6th, 2015

If you’ve been reading about the changes in credit card payments lately, you might be wondering how it’s going to affect you.
Continue »

Credit Card Rewards You Could Be Missing Out On April 26th, 2015

Are you getting all you can out of your credit cards? If you’re collecting rewards points and not using them, you are missing out on one of the best perks of having a credit card.
Continue »

How to Evaluate Credit Card Offers October 13th, 2014

When you see a credit card offer how do you know if it’s a good one? With so many different credit cards on the market, it can be difficult to know where to begin in evaluating the latest credit card offers.
Continue »

5 Signs You Aren’t Using Credit Cards Enough April 28th, 2014

If you pay for most of your purchases with cash, checks or debit cards and shun your credit cards, you probably think you’re being fiscally responsible.
Continue »

Best Credit Offer
Click the Compare link to compare the checked cards side-by-side at the comparison table.
Consumer Rating: 5 / 5
Pacific Credit Group Emporium Black Card
Copyright © 2001-2016 BestCreditOffers.com All Rights Reserved.

* The BestCreditOffers.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. BestCreditOffers.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the BestCreditOffers.com website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions.

BestCreditOffers.com makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that BestCreditOffers.com may be compensated by the credit card issuers when the readers apply for a credit card through this site.

BestCreditOffers.com is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. BestCreditOffers.com does not review or list all available financial or credit offers.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.