RICHMOND, Va. (WWBT) - A new survey by Bankrate.com says 57% of Americans are unaware of the consequences of canceling a credit card.
When you cancel a card, you might be shortening your overall credit history. The longer an account is open, the more important it is to your credit score.
Canceling a card may also mean you’ll have less credit available to you, which effects your credit utilization ratio. That’s especially a problem if you tend to keep high balances.
Your credit score takes into account five things: your payment history, credit usage, credit history, new credit and types of credit. So there are things to think through before you decide to cancel.
If you’re worried about using a card again that you want to keep open, put it out of sight. Maybe even put it on ice, so you can’t just grab it and use it.
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