Does it Make Sense to Close an Underutilized Credit Card Account?
<p></p> <img src="https://s3.us-east-2.amazonaws.com/dcr-apis/wp_contents/uploads/DCR-ADMIN/credit%20card.jpeg" alt="undefined" style="height: auto;width: auto"/> <p></p> <p>Over the past few months, I’ve been tempted to close a credit card account that I haven’t been using much. I use another credit card for almost everything, but occasionally a backup card comes in handy. What annoys me is the annual fee, which really isn’t worth it unless you use the benefits it affords you (frequent flier miles, cash rebates, etc.).</p> <p>I decided to do some research on why it might make sense to keep an old credit card account open. According to <a href="https://clark.com/" target="_blank">consumer advocate Clark Howard</a>, lenders like to see how you manage credit over time, so a long payment history will positively impact your credit score. Also, lenders prefer borrowers who use 30% or less of the available credit across all their cards and pay off their balances on time. Having more cards gives you the opportunity to charge less on each card and still have unused credit available.</p> <p>Mr. Howard suggests keeping a few accounts going by making at least two charges per year. Or better yet, put some of your automatic recurring charges on the extra credit cards to ensure they stay active. I think I’ve been convinced that having an extra card makes sense, especially if I keep flying on the airline that gives me travel awards based on my purchases. </p> <p><a href="https://www.diamondcertified.org/" target="_self">Use Diamond Certified Resource to find top rated companies.</a></p> <p><strong>Related Articles</strong><br><a href="https://www.diamondcertified.org/Guide/Personal-Finances-Investing/" target="_self">The Essential Guide to Personal Finances & Investing</a><br><a href="https://www.diamondcertified.org/find-expert-advice/" target="_self">Get Expert Advice From Owners of Top</a> <a href="https://www.diamondcertified.org/find-expert-advice/" target="_self">Rated Local Companies</a><br><a href="https://www.diamondcertified.org/membership/" target="_self">Become a Diamond Certified Preferred Member (Always Free)</a> </p>
