Have Too Many Credit Cards : How to Close it ?????

Not only applying for a new Credit Card is important, there are some important factors to consider before you decide to close it. If you have too many credit cards, closing some of them is a simple way to simplify your financial life. Many of you tend to close it in order to improve you credit score, but closing some of the credit cards may hurt your credit score instead of improving it.

Here are five credit cards that you should never close:

1. Any credit card that still has a balance.
When you close a credit card that has a balance, your total available credit is lowered to $0. Since you still have a balance on that credit card with no credit limit, it looks like you’ve maxed out. The amount of debt you have is 30% of your credit score; so a maxed out credit card, or one that appears to be maxed out, can have a very negative impact on your credit score.

2. Your only credit card with available credit.
Closing out this card will decrease total available credit and increase your credit utilization, which, as before, is not a desired situation.

3. Your only credit card.
Since part of your credit score into consideration the different types of credit you have, keeping a credit card in the mix will add points to your credit score. You could get turned down for a credit card in the future because the creditor thinks you don’t have enough experience with credit cards.



4. Your oldest credit card account.
Closing out your old credit cards shortens your credit history. Lenders tend to view borrowers with short credit histories as riskier than borrowers with longer histories. Closing your oldest credit card won't impact your credit score immediately. But, once the credit card falls off your credit report 10 years down the road, you might see an unexpected credit score drop.

5. The credit card with the best terms.
Why let a good thing go? If you have a credit card that has a low interest rate, no annual fee, and other perks like travel insurance, keep it. A credit card that charges you less for making purchases is far better than one that charges you more.

Once you're sure closing the credit card is the right move to make, follow these steps to make sure the card is closed in your favor.

Contact Customer Service

Call the customer service number on the back of your credit card. Let the customer service representative know you'd like to close your credit card account. Don't be surprised if the representative tries to talk you into keeping your account open. If you're sure you want to close the account, don't allow yourself to be convinced otherwise. Note the date and time you made this request.

 

Follow-Up With a Letter

Follow up in writing to have a record that you requested your credit card to be closed. In the letter include your name, address, and credit credit card number (or at least the last four digits of the card number). State that you made a request by phone to have your account closed on such-and-such date and you want your credit record to reflect the account was closed at your request.

 

Update Your Records

Keep a copy of the letter for yourself. Send it certified mail so you have proof the letter was mail and received should that fact ever come into question.

Source : www.about.com
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