1. Don’t  close a card that you’re currently late on.

Some folks think that by closing a credit card that is currently late, it will somehow magically make the debt disappear. Ya, not going to happen. In fact if you close a delinquent card it will look like you’re trying to hide that debt and will actually hurt your scores more.

2. Don’t close any credit card that still has a balance.

When you close a credit card with a balance, your available credit limit will be now reported as $0. So now it looks like your card is maxed out or worse yet, charged over its limit. Once again this will damage your scores cause it looks like you can’t be trusted to keep your cards under control. The way to high credit scores is by keeping your balance under 50% of your card’s limit. Got a $1,000 limit on your card? Keep that balance under $500.

3. Don’t close your only credit card with a $0 balance.

One trick to boost your score. Having two cards with $1,000 limits but only $500 balances is better than having one card with that $1,000 limit and a $1,000 balance. It’s better to spread the debt.

4. Don’t close your only credit card.

First of all, you never know when you might need it. Like an emergency car repair. But second, having a mix of credit types on your report is a good thing. Car loans, credit cards, etc. shows you’ve been trusted with different kinds of credit and that’s a good thing

5. Don’t close your oldest credit card account.

Part of your credit score is how long you’ve had credit. Even if there is a $0 balance on that old card, keep it open to give you longer credit history.

6. Don’t close the credit card with the best terms.

This is kind of  no brainer but still… When looking at closing cards, be sure and check the terms and interest rates before you do. I kept one card over another even though the rate was about the same because their flyers points are so much easier to use.

When to Close a Credit Card

It’s ok to close a newer credit card that you no longer use as long as the card doesn’t have a balance and you have other credit cards. Or, you might close a credit card that suddenly raises your interest rate or introduces an annual fee.