Should You Close Your Credit Card?

by Ron Haynes

As prices continue to rise for virtually everything we purchase, many people are seeking to limit their debt and debt exposure by closing a credit card. Does this describe you? Maybe you’re interested in limiting your possibility of identity theft and you’re thinking about closing your credit account. In reality, there are both reasons TO close a credit card and to NOT close your credit card.

4 Good Reasons To Close A Credit Card

Consider closing if your credit card spending is out of control

If you cannot seem to control your spending with your credit card, damage control means closing it is a good idea. Some people put their cards into a bowl of water and then freeze them, or store them in a safe deposit box. In my opinion, those aren’t the best way to handle out of control spending – just cancel the card instead. If you’ve had a difficult time maintaining a credit card, consider a prepaid card, such as the Prepaid Visa® RushCard instead. Also be certain to understand The Difference Between Prepaid Cards, Debit Cards, and Credit Cards

Consider closing if the credit card company isn’t playing nice

I closed an account a few years back because the company cut my credit limit by 70% and went from no annual fee to a $45 annual fee. I promptly said no thanks! I had a zero balance anyway and didn’t need the card.

Consider closing if you never use the credit card and pay an annual fee

If you haven’t used a credit card in over 18 months, the card is probably inactive on the credit card company’s system anyway. If you’re still paying an annual fee, keeping that card opened is foolish.

Hint: If you need a card, use Discover Card and pay NO annual fee PLUS get cash back! Apply HERE!

Consider closing if you believe your card’s security has been compromised

With the increase in identity theft in recent years, some people believe that by closing a credit card, they decrease the possibility that their identity will be stolen. (Don’t be a victim of this horrible crime. Be sure and read BIG RED FLAGS! Identity Theft: You Could Be A Victim And Not Even Know It.

4 Reasons You Shouldn’t Close That Credit Card


The reason you keep a credit card open is primarily driven by your need to maintain a high credit score, but there are a few other reasons to consider once you know your credit score (get your free triple credit score from

Don’t close a credit card if you still have a balance

When you close a credit card that still has a balance, your available credit on that card is reduced to zero and it appears to credit scoring companies that you have maxed out the card. When your credit score is calculated, the amount of debt you have accounts for 30% of your total score. Having a maxed-out card, or even a card that only appears to be maxed out, will have a negative impact on your credit score.

Don’t close a credit card if you have a good, long credit history

A good and long payment history helps increase your credit score, so if you have a good, long payment history on a particular credit card, then it’s a good idea to leave that card open. This is especially important if you have a poor history with other cards or forms of credit.

Don’t close a credit card if this card is your only source of credit

If you have no other credit cards or currently open loans, it’s not a good idea to close your only credit card. A big part of your credit score takes into account the different types of credit you use. If you have no other loans or credit, it’s generally a good idea to keep the only one you have available to you.

If you need a source of credit, make sure it pays REWARDS. Click here.

Don’t close a credit card if you’ve racked up some negative entries on this card

Yeah, you read that right. If you’ve had a rough patch making on-time payments or have been over your limit, you might consider NOT closing the account. The Fair Credit Reporting Act mandates that any negative history on your credit account remains for up to 7 years or 10 years for a bankruptcy. Some folks hear this and say, “Okay, I’ll wait.” But I think you have a better opportunity to get back into the good graces of the credit card company. After all, if they haven’t shown you the door despite your history with them, they’re obviously willing to give you a chance.

To close or not to close

Before deciding to close a credit card, take a look at your credit report and evaluate how closing the card will affect your credit score. By law you are entitled to one free credit report a year from each of the three credit reporting bureaus. To get your credit reports, visit Obtaining your score from all three credit bureaus is also free if you get it through

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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“Don’t close a credit card if you’ve racked up some negative entries on this card” So what do I wait 7-10 years to close the card? I don’t understand the reasoning behind this!


The reason you don’t close it is because you fix your negative entries by making timely payments and paying it off. Then you should close it as long as those negTive entries have been overcome.


We’ve closed two credit card accounts with Capital One where they wanted to change the terms (hiking the interest rate) and they provided the option to close the account and pay off under the current terms/interest rate. We went ahead and closed them, and on all of three credit reports they still show as “open” accounts with the original credit limits reported. YMMV obviously.

Perhaps there is an “available credit” amount that shows up when a company pulls your credit report, but doesn’t show when you get a copy yourself? FWIW, Credit Karma calculates the credit usage percentage based on the limits and balances as reported on our credit reports…


Will it impact my credit score if I close credit cards I have never used? I have about 10-12 credit cards but about 2 of them I have never used. The balances on any are less than 33% of credit limit. I feel like I am being denied lately because I may have too many and closing some might be better in my case. Any advice would be appreciated! Thanks!

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