The Truth About Canceling Credit Cards
Protecting the health of your credit score should be a top priority in managing your finances, and by now you've probably gotten the low-down on all the best practices you should be adopting if you want to strengthen that ever-important number. Some of these habits include: paying bills entirely every month, checking your credit score regularly, and setting up direct payments.
Although it may seem counterintuitive, another secret to a healthy credit score is keeping credit card accounts open — even if you don't use the cards very often. Most of us, however, are guilty of committing the credit sin of cutting up cards, so we wanted to ask a professional: exactly how bad is it to cancel a credit card?
Here's what Jennifer Jackson, managing vice president at Capital One, had to say:
It is not necessarily "bad" to cancel a credit card — but the impact of that will be dependent on each individual's circumstances. The average age of your accounts is a significant part of your credit score; therefore keeping your oldest cards open, even if they are not active or have a balance with them, will typically help one's credit score (but again, it depends on each individual and their circumstances). Closing a more recently opened card might have less of an impact.
So although it will vary from person to person, in general, the wisest course of action is to keep those credit cards intact.