You’ve heard that closing a credit card before can hurt your credit score and while it can, you’re going to find that it may help you financially more than anything.

What gets me is that people are so obsessed with their scores.  This is how I see it.  If you’re not applying for any credit in the near future, do you really care if your score is going to drop 2 measly points?  Banks only look at your score from a range anyways and not specific numbers.  Closing your card is only going to drop your score a few points, if anything.

Now, closing a credit card really isn’t that hard, but you may want to think twice, if your card is going to meet any of the pointers below.

#1 Your oldest credit card: If you’re closing your oldest credit card, you may want to think twice.  By closing this card, it’s going to shorten your credit history.  What I would do is just shred it and forget about it.  The credit card companies don’t know if you’re using it or not.  They could still think it’s sitting in your wallet.

#2 It’s your only card: When you only have one card in your wallet, you want to keep some sort of credit going.  If you don’t have any credit available, how are you going to build it?   Unless you don’t care about your credit, you may just want to keep it open.

#3 Your best credit card: Are you disciplined with your credit?  If you are, you may want to keep your best card opened.  Your card with the best rewards are going to help you more with your purchases.  If you get a certain amount in cash back and you pay it off on time, why do you want to close it?

#4 Pay off the card first: Make sure that you always pay off your balances before you close up your card.  You don’t want to do this because it’s going to show that card as a $0 balance and if you have a $1,000 on it, it will look as if you maxed it out.

If you want to close a card that you just opened, or one that you just don’t want anymore, that’s fine.  As I said before, it’s going to effect your score a little bit, but not that much.  Don’t let the credit score nazis haunt you, but instead, make the right decision in closing it yourself.

How do I close my card?

It’s really simple!  Just flip the card over on the back and call the toll free number.  Just be aware that they are going to ask you why and try to keep your around.  Just keep telling them no and it should be a breeze.

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