Despite the fact that closing a credit card can have a negative impact on your credit score, you may strongly believe it’s the best decision for your finances.
Of course, you don’t want to head down this path until you’re 100 percent sure of what you’re doing.
How are a few times when it makes sense to cancel a credit card:
- You worry about overspending in the future: Only you know if you’re responsible enough to carry a credit card. If you have concerns about overspending – maybe because you’ve run into trouble in the past– it may be best to cancel your card once and for all. If you don’t have acredit card, you can’t abuse a credit card.
- You need to better organize your finances: Generally speaking, it’s easy to manage one credit card. However, as you add more into the fold, it can become challenging to do so. You have to track debt across several cards. You have to keep up with minimum payments. You need tounderstand the due date of each payment. This can be a lot of work, especially when you consider all the other financial details in your life that require your attention.
- The terms and conditions have changed: Overtime, your credit card issuer may alter your terms and conditions to bettersuit their needs. Subsequently, you’releft with a card that no longer suits you. From the interest rate to the annualfee to the rewards program, keep an eye out for changes.
If you feel strongly that canceling a credit card would be in your best interest, don’t hesitate to take action. It’s not always an easy decision, especially if you have concerns about the impact on your credit score, but it could be just what you need to improve your finances.
Do you have any experience canceling a credit card? Did it work in your favor over the long run?
