Closing Credit Card Accounts

Posted by Nick Niesen on October 29th, 2010

Most experts advise consumers to avoid having too many credit card accounts. When you decide to open a new card because it has better rates, it is important to make sure you properly close your existing credit card. There are a number of reasons why you should close existing accounts when opening a new credit card.

Closing some of your cards will allow you to have control over them. When you have multiple cards, it is easy for some of them to get lost. If this happens, you are susceptible to being the victim of fraud if somone finds it. Closing your accounts will also allow you to maintain a good credit report. You credit score may be lowered if you have multiple accounts, because you are seen as being a risk. Closing your accounts will also allow you to avoid fees and universal default.

Any credit card accounts which are not being used should be closed. At the same time, you want to make sure you don't close your oldest card, as this could damage your credit score. It will also allow you to avoid being the victim of identity theft. It is important to remember that some cards have annual fees, and you will still be charged even if you're not using them. If you have an account with a balance that you are trying to pay off, and you don't want to use it, cancel the card and continue making payments. This will keep you from using the credit card and adding more money to it.

It is important to remember that it is best to have a single credit card, but at the maximum you should only have three. This will keep your credit score in good shape, and your creditors will reward you for using them in a responsible manner. You will want to reserve a credit card for making specific payments, and setup a plan to make sure it is paid off by the end of the month. If you cancel a credit card, make sure you cut it up. Otherwise, someone could steal it an reopen the account.

It is important to make sure you call the company and cancel the card. Don't assume that the card is closed just because you cut it up. You may have to submit a request in writing. The company will typically send you a letter confirming the account has been closed in about 14 days.