Don't Screw Yourself. The Do's and Dont's of Closing Credit Card Accounts.

Don't Screw Yourself. The Do's and Dont's of closing Credit Card Accounts.

Closing old and unused credit accounts can help you avoid unnecessary fees and guard against identity theft. I am guilty of having done this. Usually out of anger. It feels good at the moment telling your financial institution to go fly a kite. However, it can and usually does DROP (did for me) your credit score if you aren't careful.

Here are a few Do's and Don'ts and Don'ts and Don'ts for closing those dormant accounts:

DO… Consider closing unused cards that are costing you money. If your card has an extraordinarily high interest rate or an abundance of fees, and your provider isn't willing to lower your rate or waive some fees, you may want to consider closing the card - especially if you don't use it. If you don't use it and the accounts zeroed out, it may still be beneficial for you to pay the annual fee and bite the bullet, especially if you have had the card for more than 7 years.

DO... Be aware that you can usually cancel accounts that have an active balance by asking your creditor to close the account to new charges while you continue to pay down the balance each month. This may be a good way for heavy credit users to prevent new spending while they are reducing their balances. However, watch out for additional fees. Yeah, some banks will charge you for closing it out without an outstanding balance. Be sure to ask first. And always ask to speak with a supervisor. They might (certainly can) waive those fees.


Do… Aim to keep some accounts open. This is generally recommended to keep your credit score and debt balances healthy. Signs of active and responsible credit use are viewed positively by creditors. It shows HISTORY. They like to see 7 PLUS YEARS of it too.


Do… Always check your credit report for updates and errors after you close accounts. You should generally wait 30 to 60 days for the creditor and credit bureaus to update your records. While the accounts and their payment histories may stay on your report for seven or more years, the status should be updated to reflect that they are closed. You would be surprised how many errors I have found on my credit report. You have to dispute them!! And if you want to learn how, I can show you. And it's FREE to do so.


    Don't, DO ABSOLUTELY NOT... Close the oldest account on your credit reports. This could cause your credit history to appear shorter, which may (and will) harm your credit score. Don't do it. No bueno.

    Don't... Just throw away old cards and expect your accounts to close automatically. The safest way to close an account is to send a certified letter to the customer service department of the creditor. Typically, you should receive an account closing confirmation letter in 10 days. Be a BIG BOY and OPEN YOUR MAIL.

    Don't… Be BULLIED to cancel several accounts all at once. Tighten your belt and grit your teeth. If you want to cancel numerous credit accounts, spacing the closures over time could reduce the chance of attracting negative suspicion from potential creditors. They're sneaky lonely bastards.

    Don't over-consolidate balances onto one card. A good rule of thumb is to keep your credit balances under 30 percent of your available limits if possible. If it's one of those 0% interest for 18 months offers, think about it if you believe it will help you manage your debt!

      Look, debt is good. Credit card debt, not really. But we use them. Be Responsible So You Don;t Get Screwed.

      If you have any more questions, hit me up with a comment.