By Kelly Lynn Adams

Your Money Question…

Hi Kelly,

I have a credit card I never use – and that has zero balance. I want to close it (to free up space in my wallet, of course!) but heard that you should never cancel a credit card – that is hurts your credit rating – but I’m charged a small fee to keep it open every year and I was wondering if it was really worth it to keep it open (when all it does is annoy me!).


“Worried About My Credit Score”

Your Money Answer…

Dear “Worried About My Credit Score,”

A lot of people worry about what happens to their credit score when you want to get rid of a credit card, close it out and never use it again. And there is a lot of conflicting information out there. So, here are some pros and cons to canceling a credit card.

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First, let’s start with the basics: Your credit score is a number that measures your creditworthiness and determines what types of credit you can obtain and how much it will cost you.

There are two instances where canceling out a credit card can hurt your credit score. The first is when you close out a really old card. The longer you have an account open, the more weight it carries in your credit score. The second instance of where canceling your credit card can hurt your credit score is when you close your credit card with a balance left on it (especially one close to your limit!). If you have a zero balance on your credit card and you want to cancel it, you can cancel it with minimal impact on your credit score.

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While there might be a slight affect on your credit score if you cancel a credit card there are also pros to closing out a card. It reduces the risk of identity theft, prevents you from abusing the credit card and puts you more in control of your finances.

This all being said, if you intend to take out a major mortgage or auto-loan, it is recommended that you do not cancel out any of your credit cards. Instead, if you want to stop using your credit cards, put them in a safety deposit box at your bank so that they are not easily accessible in your wallet.

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