If you are one of those people who have been working hard for months or even years, to pay off your credit card debt, and the moment you make the final payment, it feels like a truly awesome victory. All of your hard work has been paid off, and a serious burden has been lifted off your back.
But now, you are faced with a new dilemma, should you cancel your paid off credit card? Your intuition probably tells you to contact your credit card company and tell them that it was very hard for you to pay off your credit card debt, and you don’t want to go through it again. So you ask them to cancel your credit card, right?
However, this may sound strange to you, but cancelling your paid off credit card won’t be a smart thing for you to do. The reason is that if your close your credit card, this could affect your credit score in a negative way.
But just like other personal financial decisions, deciding whether or not to cancel your paid off credit card is your own choice. Before you make your decision take a look below of some guidance about what might be the best thing to do.
You may consider closing your paid off credit card if:
1. You think there’s a risk that you may get stuck with credit card debt again. If you sense that you’ve trouble in managing your finances responsibly or have the tendency to overspend.
2. You have been a victim of fraudulent activity or identity theft. You can be afflicted with this problem if you don’t regularly maintain or use your credit card. So, you may have difficulty in detecting if any fraudulent charges that may be happening.kazan artem meleuz yuzhnouralsk zlatoust ufa turuhansk troick rubcovsk nevyansk belovo zelenogorsk seversk vyazma votkinsk barnaul kineshma maloyaroslavec berdsk kachkanar ishimbaj uglich tula novokujbyshevsk salavat tver novoulyanovsk apatity kurgan neftekamsk polysaevo nevyansk ulyanovsk tajshet yarcevo azov kondopoga nahodka kineshma gelendzhik novotroick kandalaksha zarinsk chita belorechensk kirzhach ishim novotroick cherepovec enisejsk ahtubinsk beloreck nizhneudinsk dimitrovgrad pervouralsk cheremhovo habarovsk armavir
3. Your credit card has annual fees. If your paid off credit card has annual fees, then you have the option to upgrade your credit card that has no annual fees. Your credit account stays the same, so your credit score won’t hurt in any way.
Now, it’s probably for the best to keep your paid off credit card active if:
1. You’re certain that you won’t have any credit card debt again. Using a credit card in a responsible way is the good way to build up a great credit history. So, if you think that you spending habits are in control, then keep your credit card open. Just make sure you pay off your credit card balances in full every month after making purchases.
2. Your credit history is short. If your credit history isn’t long, then it’s a bad idea to close your credit card account. Doing this will eliminate your past credit history, and if you don’t any credit card account to boost your credit score, then it will be disastrous. If you happen to be in this situation, then keep your credit card account open.
3. You don’t have other types of revolving credit on your credit report. As you know, 10 percent of your credit score is determined by the types of credit accounts you have. If you don’t have any other revolving credit like another credit card or auto loan in your name, then closing your credit card will harm your credit score.
The bottom line is choosing to or not to close your paid off credit card varies on many factors, so make sure that you carefully analyze your current situation before you take any decision to say goodbye to your paid off piece of plastic card.