Credit Card Cancellations and Credit Scores
Although many people don't realize it, all of the different actions that you take with your credit card can actually have an effect on your credit score. If you don't pay your bills on time each month, then this could end up negatively affecting your credit score. If, on the other hand, you pay all of your bills on time, then your credit score is likely to improve. These are not the only things that can have an effect on your credit score. If you cancel your card, then this can affect your credit score too.
If you're surprised to find out that cancelling your needed credit card account will affect your credit score, then you are just like a lot of other cardholders. A lot of people overlook this fact when they are getting rid of their cards. Depending on the circumstances surrounding your cancellation, you could actually damage your credit score by cancelling your card. If this is something that you want to avoid, then you might want to reconsider your decision to cancel your card now and put it off until a later date.
Understanding Effects of Cancellation
If you cancel your credit card today, it could have some serious effects on your credit score. This is all really going to depend on the circumstances of your cancellation. If you are cancelling it because you have put too much money on it and can't make the payments on it, then this will be bad for your score. You need to make sure that you have the money to pay off all that owe on it before you cancel because this money will be due. If you can't pay it, this is definitely going to make your credit score go down.
If you decide to cancel your card when it has a zero balance and you have not had it for a long time, then this might not have a negative effect at all. If you haven't used the card to build up your credit history and you don't owe the company anything, then there is a good chance that you will not have to deal with any problems after cancelling the card. Just make sure that you have paid off everything before you do this. If you don't it could cause some problems.
Cancelling a credit card that you have had for a long time can really have an adverse impact on your credit score. One thing that helps your credit score a lot is how long you have had a card and paid on it consistently. Once you cancel a card, you will not be extending the amount of time that you have paid on it. This won't affect every consumer seriously, but it might affect you in some way so you should try to avoid it if you possibly can.
Alternative to Cancellation
If you are concerned about credit card cancellations and credit scores, then you might want to consider some alternative to this process. There is nothing that says you actually have to cancel your credit card. If you can work on paying it off quickly, then you can just keep it at home and not use it for anything. If you keep it active, you are not going to be damaging your credit score at all. Review your reasons for cancellation before you actually make that decision. It really may be in your best interest to just stop using your card so much and only keep it for emergencies.
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State Guides to Credit Card Laws
- North Carolina
- West Virginia