Is Closing Unused Credit Cards Good or Bad for Your Credit Score?

Discover how closing unused credit cards affects your credit score and what to consider before making the decision.

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Closing unused credit cards can impact your credit score, mainly by reducing your available credit and increasing your credit utilization ratio. If the card has no annual fee, it might be better to keep it open. If you must close it, pay off any balance first and notify the issuer.

FAQs & Answers

  1. What happens to my credit score if I close a credit card? Closing a credit card can lower your credit score by increasing your credit utilization ratio and reducing your overall credit limit.
  2. Should I close a credit card with no annual fee? It's often advisable to keep cards with no annual fee open, as they contribute positively to your credit utilization ratio.
  3. How does closing a credit card affect my credit history? Closing a credit card can shorten your credit history, which may negatively affect your credit score if it's one of your older accounts.
  4. What should I do before closing a credit card? Ensure to pay off any remaining balance and notify the card issuer before you proceed with closing the account.

Watch More

For more insights on managing your credit and financial health, check out our videos on understanding credit scores and tips for effective credit management.

  1. Steps to Close Your Credit Card with Outstanding Balance Learn how to effectively close your credit card with an outstanding balance by following these simple steps.
  2. Do You Need to Pay Credit Card Fees Even If You're Not Using It? Learn if you need to pay credit card fees when not using your card. Understand annual fees and maintaining your credit score.
  3. Does Not Using a Credit Card Affect Your Credit Score? Learn how not using a credit card could hurt your credit score and effective strategies to maintain a good score.