Thinking about closing a credit card? You need to look at both short-term and long-term money effects. Lots of folks want to cancel cards they don’t use to keep things simple, but that move can really hurt your credit score and borrowing ability later. I learned this the hard way – paid off a store card and closed it, then my credit score dropped 15 points the next month. This article will examine the crucial factors surrounding credit card closure, including effects on credit utilization, credit history length, and when cancellation might actually be beneficial.
Table of Content
Understanding Credit Score Impact
How Cancellation Affects Credit Utilization
Core concept: Your credit utilization ratio shows how much credit you’re actually using versus what you have available. Closing a credit card cuts your total available credit right away.
so your utilization percentage goes up even if you spend the same amount. Say you owe $5,000 across all your cards and have $25,000 in total limits – that’s 20% utilization.
But close a card with a $5,000 limit, and your available credit drops to $20,000, pushing utilization to 25% – that might hurt your credit score.
Practical strategy: Before you cancel any credit card, figure out what your credit utilization would look like afterward. Money experts usually say keep your total utilization under 30% across all your credit cards.
If canceling cards would put you over that limit, try paying down balances first or ask for higher limits on your other cards to make up for the credit you’re losing.
Age of Credit History Considerations
Core concept: How old your accounts are really matters for your credit score. When you close older credit cards, it can shorten your credit history, especially if it’s one of your oldest accounts.
Credit scoring systems like seeing long credit relationships, so getting rid of an old account can really hurt your score.
Strategic approach: If you really need to cancel credit cards, go for the newer ones with smaller limits and keep your oldest accounts open. I found this out the hard way when I almost canceled my first college credit card – one I’d had for more than 15 years. My financial advisor told me that keeping that card open, even if I barely used it, was protecting my long credit history.
When Credit Card Closure Makes Sense
High-Fee Cards with Minimal Benefits
Core concept: Some credit cards charge annual fees that outweigh their benefits, particularly if you’re not utilizing the rewards or perks. When that happens, canceling could be the smart money move.
But before you cancel, call your card company first. See if they have a no-fee card you can switch to instead. That way you keep your credit history but ditch the fee.
Decision framework: Just do a quick check – compare what you pay in fees versus what you actually get back from the card. For instance, a $95 annual fee might be justified if you’re earning $300 in valuable rewards.
but not if you’re barely using the card. Sometimes just threatening to cancel gets them to waive the fee, so always try negotiating first.
Temptation and Overspending Risks
Core concept: If a certain credit card makes you overspend constantly or stresses you out money-wise, cutting it up might be better for your financial health. Getting rid of that temptation can be worth the small, temporary hit to your credit score.
This goes double for store credit cards with crazy high interest rates that push you to buy on impulse.
Behavioral strategy: I found myself repeatedly overspending with my Bass Pro credit card whenever I visited their stores. Those instant discounts hooked me, but then I was stuck with balances at sky-high interest rates.
Once I closed that account, I started spending more carefully, and the peace of mind totally made up for my credit score taking a small dip.
Thinking about canceling credit cards? Here are some better options.
First up, you can just switch your card type.
Most banks let you change your credit card without closing it. This keeps your credit history intact and your available credit too. They call this a product change. You move to a different card with the same bank but keep your original account age.
How do you do it? Just call your card company and ask about switching to cards with no annual fee. Most big banks offer this, though your options might differ. I switched my pricey travel card to a basic free one. Kept my 10-year history and saved $150 on fees.
Another idea: cut back without cutting off completely.
Worried about spending too much but don’t want to hurt your credit? Just limit your card use instead of canceling. You could literally cut up the card or lock it away somewhere safe. The account stays open. Some banks even let you lower your credit limit temporarily or set spending caps.
| What you do | Effect on credit | Works best for |
|---|---|---|
| Closing cards completely | Could hurt your credit | Cards with high fees or if you overspend |
| Switching card types | Little to no impact | Keeping your credit history strong |
| Using cards less | No credit impact | Getting spending under control |
| Lowering your credit limit | Very small effect | Managing your financial risk |
Now let’s talk about store cards – there are some special things to think about.
The Bass Pro Credit Card Scenario
Core concept: Store-specific credit cards like the Bass Pro credit card often come with unique considerations. They usually charge more interest and you can’t use them many other places.
When you’re deciding whether to cancel credit cards like these, you need to ask yourself: are the special perks worth keeping a card I barely use?
Think about how often you actually shop there and if the discounts are good enough to keep the card. If you don’t go to those stores much anymore, the card probably isn’t helping you.
But if you shop there all the time and really use the benefits, keeping it might make sense even though you can’t use it everywhere.
Here’s how store cards affect your credit mix.
Credit scores look at what kinds of credit you have. If you only have store cards, that doesn’t look as good as having both store cards and regular credit cards.
So if you’ve got lots of store cards but not many bank cards, canceling one store card won’t hurt as much as canceling your main credit card.
Before you cancel any store cards, take a good look at all your credit accounts. Using one or two store cards regularly is okay, but having a bunch you never use makes lenders nervous. It’s usually smarter to stick with fewer cards that you can use anywhere.
Here’s how you cancel credit cards step by step
First, get ready before closing your card
Core concept: Proper preparation before credit card closure can minimize negative consequences. Start by paying whatever you owe and cashing in all your rewards Change any automatic payments on that card and make sure you have other ways to pay your regular bills.
Here’s your plan: About a month before you cancel credit cards, find every service that charges that card and move them to different payment methods I made this mistake once – forgot a streaming service auto-payment and lost service after closing the card Now I always make a list of all automatic payments before I start closing accounts.
How to actually close your card the right way
When you’re ready to cancel credit cards, call your bank directly – don’t just stop using the card Don’t settle for just a verbal okay – ask for written proof that you asked to close the account and that credit bureaus will see it that way This paperwork saves you if the account shows up wrong on your credit report later.
| What to do | When to do it | Main steps |
|---|---|---|
| Get ready | One month ahead | Move automatic payments, cash in rewards |
| Pay what you owe | Two weeks before | Clear your balance, ask for any money back |
| Close the account | When you call | Call your bank, get a confirmation number |
| Check afterward | One to two months later | Look at your credit report to make sure it’s right |
Post-Cancellation Monitoring
Tracking Credit Report Changes
Core concept: When you cancel credit cards, keep an eye on your credit reports. You want to see closed by consumer not closed by grantor on there. Mistakes in how they report it can hurt your credit score even more.
Good news – you get free yearly reports from all three credit bureaus. That’s where you check this stuff.
Monitoring strategy: About a month or two after canceling credit cards, pull your reports. If you spot errors, dispute them right away. I set calendar reminders to check my reports every three months on AnnualCreditReport.com.
That’s how I found a messed up account closure. When they fixed it, I got 8 points back on my score.
Rebuilding Strategies After Closure
Core concept: If canceling credit cards makes your score drop, start rebuilding right away. Pay all your bills on time, keep your balances small, and don’t apply for new credit unless you really need to. Just keep doing the right things and your score will bounce back over time.
Recovery approach: You could ask to be an authorized user on a family member’s old account with great payment history. Or get a secured card if you need faster credit building. The main thing is showing you handle credit responsibly with the accounts you keep, while your credit history settles down.
When you think about canceling credit cards, you’ve got to weigh several money factors. Your credit score matters, and so do your spending habits. Sometimes canceling credit cards is smart, especially with pricey cards or ones that make you overspend.
But don’t decide too quickly. Before fully canceling credit cards, think about other options. You could ask for a product change or just use the card less. Then keep watching your credit after. Your credit health really comes down to making smart choices about every credit card you keep or cancel.
Thinking about canceling credit cards to make your wallet work better?
Got stories about canceling credit cards? Drop them in the comments!
Or check out our tips on credit utilization – it’ll help keep your finances safe. Start managing your credit smarter today – just make those informed choices about whether to cancel credit cards.
FAQ About do you cancel credit cards
When you cancel a credit card, how long does it show up on your credit report?
If you closed the account when it was in good standing, it’ll stay on your report for about 10 years. During that time, it still helps your credit history length. But if the card had late payments or other problems, those negative marks usually drop off after seven years.
Does canceling a credit card hurt your credit score right away?
Yeah, most folks notice their score drops pretty quickly after they cancel a card. That’s mainly because your credit utilization goes up. How much it drops depends on your whole credit situation – usually between 5 and 20 points. You’ll see a bigger hit if you cancel older cards or ones with high limits.
Is it better to cancel unused credit cards or keep them open?
Most of the time, you’re better off keeping those unused cards open. Unless they’re charging you high fees or tempting you to overspend. They keep helping your score with your good payment history and the available credit they provide.
If you’re worried about fraud or spending too much, try locking the card or asking for a lower limit instead of canceling it completely.
What should I do with my Bass Pro credit card if I no longer shop there?
If you rarely use your Bass Pro credit card, consider closing it, especially if you have other cards with better terms. Before you cancel, check if you can switch to a more general card from the same bank. That way you keep your credit history but get a card you’ll actually use.
