Closing a Credit Card
The idea of closing a credit card can be very appealing. It might also be helpful, but there are a few things you need to consider before moving forward with this decision. First of all, you want to take the necessary steps to establish a good credit history. If your past is littered with sporadic or late payments, then you’ll want to work on making regular, on-time payments to move your credit report in the right direction.
Number of Credit Cards
The more cards you have, the more likely that closing one of them would be in your best interest. If you have just a few credit cards, however, you want to avoid doing this as it will have a potentially negative impact on your report. The more that the credit bureaus can see how well you manage your accounts for a longer period of time, the more likely they are to raise the numbers in your report, which will raise your credit score.
Credit Card Terms
It is important to take a close look at the terms for the various credit cards that you have. Not all terms are the same, and some can actually make it very difficult for you to maintain a good credit history. In particular, you want to pay attention to the annual percentage rate (APR) on each card. The higher the interest rate on your balance, the longer it will take for you to pay off the card.
Closing a credit card is not always the right step to take when you are trying to repair your credit history or improve your credit score. Contact 360 Credit Consulting today and schedule a free consultation to learn what the best steps are for your financial situation.