Best Time to Close Your Credit Card
A credit card can be a good payment method that you can use for purchasing any products or services from the market. However, it can lead to missed payment and also a decreased credit score, especially if you have too many credit cards in your pocket. There are some cases when you may want to consider closing your credit cards. Closing your credit card may affect your credit score because it will change your credit history and also utilization rate. Here are some reasons why credit card closure can make sense in your situation.
You are getting divorced
This is the first situation that you may want to consider to close your credit cards. When you are getting separated or divorced from your spouse, you should consider closing all of your credit cards. By closing these credit cards, you are not responsible for any bills that may occur in the future. If there is a bill, the credit card issuer will collect the balance by looking at both account holders for payment. Credit card closure can help you get away from this type of responsibility after you are divorced from your spouse. You will be able to stay away from any problems that may occur in the future.
You don't want to pay the fees
Most credit cards usually charge some fees to their customers, such as annual fees or late fees. You can negotiate with some credit card providers for getting a free annual fee. However, not all companies are ready to give you this facility when using your credit card. When this situation occurs and you don't want to pay the annual fee, you can ask for the credit card closure. Closing your credit card can help you avoid paying expensive annual fee every year. It can be a good reason for credit card closure, so you can take your business to other places without an annual fee.
The card is no longer good for your needs
This is another reason why you may want to consider closing your credit card. In some cases, you may open your credit card for getting advantages of the frequent flyer miles. You may be able to use these miles for traveling around for free. When you are not interested in traveling anymore, you can consider closing your credit card now. Most airline reward credit cards usually have expensive annual fees after the first year. You can switch to other credit cards that offer useful rewards programs for all customers.
The card is used fraudulently
Credit card fraud will be the best reason for closing your credit card. Most credit card issuers are going to close your account automatically when your credit card is stolen or lost. However, this is not always the case. In some cases, you may want to close your account for any fraudulent cases. When you subscribe to any products or services online and you cannot cancel the subscription, you can ask the card issuer to cancel your account. Closing your credit card can reduce the risk of getting any fraudulent cases on your credit card.
You are done with debt
This is another good reason for credit card closure. If you feel enough with all the debts that you have in your credit card, you can simply pay off all debts from your credit card. Then, you can close some or all of your credit cards in your pocket. Closing your credit cards can reduce your habit of taking any debts regularly. If you cannot resist the temptation of purchasing any unnecessary products or services with a credit card, you may want to consider the credit card closure as a good option for you.
Before you close your credit cards, you should take a look at all the pros and cons of the credit card closure. You need to consider everything, including your credit score, especially when you want to close your credit card. You can consult with a professional financial advisor, so you can talk about how you can close your credit card without hurting your credit score on the credit report. There are some actionable steps that you have to do, so you can close your credit card without having any problems in the future.