“Will closing credit cards hurt my credit score? and “Should I close my credit card account?” are two commonly asked questions when people start getting out of debt.
Some people want to close their cards so they aren’t tempted any longer, and others just want them GONE! Either way, here are a couple of things to keep in mind when it comes to closing credit cards.
Generally speaking, if you’re concerned about your credit score, you’ll want to keep your oldest account open where possible. If your oldest account is a credit card (which it is in many cases) closing it can reduce your score. Even if it’s not your oldest account, closing it could have an impact on your score.
However, that doesn’t mean that you need to keep carrying a balance on your credit cards just because they’re open. If you want to keep, say, your oldest account open and the credit card company is threatening to close it if you don’t use it, you can always charge a tank of gas or something on it and then go right home and pay it off immediately. You can always just cut up credit cards too.
Closing everything was not the end of the world
On a personal note, I’m not one to monitor my credit score heavily — in fact the only times I’ve seen my scores have been when applying for a mortgage or a refinance. But I will say that there are many people out there (like me) who’ve ended up closing all of their accounts due to things like divorce, and doing so is not the end of the world. That’s because your credit score is based on your credit history — history which continues on as time goes by. And recent history counts for more than ancient history.
So just do what’s best for your situation, without being a slave to the credit industry.