Key Considerations Before Closing a Credit Card

Key Considerations Before Closing a Credit Card

PHOENIX--A credit card can be closed at any time, right? The answer may be more surprising than most people think. While there are certainly occasions where it’s appropriate — and wise — to close out a credit card, there are other situations when discontinuing an account can damage one’s financial outlook.

“For instance, if you have a large purchase on the horizon — such as a house or vehicle — closing a credit card could actually impact your ability to qualify for the loan.”

"It’s important to understand how closing a credit card can affect current and future credit,” said Amy Robbins, associate director of operations with Take Charge America, a nonprofit credit counseling and debt management agency. “For instance, if you have a large purchase on the horizon — such as a house or vehicle — closing a credit card could actually impact your ability to qualify for the loan.”

Robbins outlines the dos and don’ts every credit card holder should know before closing a credit card:

Do close a credit card if:

Don’t close a credit card if:

Take Charge America provides free and confidential credit counseling if you have questions about credit use and budgeting.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts. To learn more, visit takechargeamerica.org or call (888) 822-9193.