Top 5 Myths About Credit Cards

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The Myth of Closing Credit Accounts

It seems logical to close unused credit accounts, right? Yet closing them could actually hurt your credit score. It is a myth that persistently leads people astray—closing accounts reduces your available credit which shifts your credit utilization negatively.

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Interestingly, maintaining several open accounts can demonstrate financial stability. Lenders favorably view an extensive credit history; thus, keeping even your oldest, least-used cards open could be surprisingly beneficial. The age of credit accounts, contributing to about 15% of your score, tells lenders your lifelong reliability as a borrower.

Feel like purging your wallet? Think again. Before the urge hits to declutter those cards, consider reaping the hidden benefits of long-standing relationships with creditors and increased credit limits they unwittingly provide.

But there’s one more twist to closing accounts that might shock you: sometimes, negotiating with your card issuer for better terms can be more advantageous than cutting ties. Keep reading to learn about how to make card closures work in your favor…