Closing a credit card account can be frustrating and confusing. It's hard to know what fees there are, what you can do and what will impact your credit score. If you owe a balance, you can still close the credit card. But there are a few things to consider.
Keeping a Balance
While you can keep a balance on a closed credit card, it may not be in your best interest. Carrying a balance on a closed card can hurt your credit score, according to MSN Money. You'll also be racking up interest charges, which you will eventually have to pay off. If you can, pay of the balance before you close the account. If not, consider transferring the balance to another card with a lower interest rate.
References
- MSN Money: Tim Sullivan: 6 Steps to Closing a Credit Card
- Nolo: Margaret Reiter: Closing Credit Card Accounts to Manage Debt
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009—Sec. 171. Limits on Interest Rate, Fee, and Finance Charge Increases Applicable to Outstanding Balances." Page 6. Accessed Nov. 2, 2020.
- Experian. "How a Balance Transfer Affects Your Credit Score." Accessed Nov. 2, 2020.
- Experian. "What is a Credit Utilization Rate?" Accessed Nov. 2, 2020.
Writer Bio
Specializing in food and business, Melissa Haskin is a Oregon writer who received a Bachelor of Science in economics with an emphasis in business from Oregon State University. She completed graduate work in journalism at the University of Oregon and has contributed to publications such as "The Register-Guard," "Oregon Quarterly" and "Eugene Magazine."