After you pay down a high balance of credit card debt, you might feel as though it is a good idea to cancel the card so you don’t find yourself in trouble again. But, that typically isn’t the case as getting rid of your card could hurt your credit score.
However, there are certain instances where canceling your card won’t do too much damage to your credit standing, including:
1. If you don’t plan on obtaining a loan any time soon
If you are looking to a buy a car or home in the near future, it would be wise to avoid closing a credit card, as this could damage your credit score. With a low score, the rate and terms you receive on your auto or home loan could be less than favorable. Closing a card doesn’t do permanent damage to your score, though, which is why you should give yourself a couple of months for it to repair itself if you desperately want to cancel a credit card.
2. If your mailbox is full of credit card offers
Credit card providers often send numerous offers to consumers who are eligible for new credit. If you are one of these people, canceling a credit card might not do enough damage to hurt your score too much. However, if you don’t have any offers in your mailbox it would be wise to hang onto your card as this could mean you aren't eligible for any new cards.
3. If you are splitting up with someone
In certain instances, canceling your credit card could be a necessary move, one of those being when you are splitting up with a girlfriend or wife. Oftentimes, people who have been together for a long time share bank accounts and credit cards, and if you are no longer together than you will want to cancel the card that has both of your names on it. Failing to cancel a card could leave you responsible with any debt he or she creates.
4. If your provider has changed your terms
Some credit card providers will change your terms, such as the interest rate or fee, and if these are now too high than you might want to cancel your card. You can try and negotiate with them, but that doesn’t always work. Should this be the case, call them up, cancel the card and throw it in the trash after you cut it up.
April Lewis-Parks has more than 15 years of experience in the financial sector, she is a certified financial counselor, and a consumer affairs advocate. As the director of education and public relations for Consolidated Credit she is dedicated to generating awareness about personal finance issues and acts as their consumer affairs advocate. As host the of MissMoneyBee.com, she promotes financial education and offers timely and informative personal finance articles to educate the public. The blog is dedicated to empowering women through financial education and uplifting women through a common interest – being financially independent and responsible. Her promotional efforts can be seen in past issues of the New York Times, Washington Post, Newsday, Consumer Reports, the Business Journals, Money Magazine, Glamour, Cosmopolitan, Family Circle, among others. /about-us/bio/april-lewis-parks/#sthash.UOdeXnOt.dpuf Google+