Credit Cards Weblog

There was a time when closing a credit card account reflected negatively on the consumer’s credit history. This applied not to cards that were in the default zone, but to cards that had healthy accounts. This may seem to defy common logic, however if one were to consider it from a credit reporting agency’s view point, they would probably believe that the customer’s aggregate ability to pay for credit was dwindling, hence he was closing healthy accounts.

However, of late, with the influx of a large number of credit cards, consumers today end up holding several cards and may find it prudent to give up a few. Having recognised the fact that the number of credit cards in the economy is far too many, potential lenders also expect consumers to have closed a few accounts and do not mind seeing it on the consumer’s credit report.

According to the Federal Credit Union "there was a time when having closed credit card accounts made it harder to get credit. Now with so many credit cards being offered to consumers, it’s not unusual for customers to close accounts."

Hey, but don’t dash off in a hurry to close just any account. According to experts, you need to be careful in selecting the accounts that you want to close and when you want to close them.

First, do not think of closing an account that still has a balance. If you inform your card provider that you were going to close such an account, he will in all probability, jack up the interest rate applicable to your account. Hence, you should plan to close an account that does not have any outstanding balance.

Secondly, inform your card provider of your decision by phone and also send a written card closure request. Also ensure that the closure statement issued by the card provider states that the account was closed on your request.

Good luck with your credit cards and financial management.