Deciding to cancel a credit card is a big decision. Do you know both the pros and cons of doing so? If you are thinking about canceling your credit card you should take a step back, realize the good and bad, and then make a final decision when the time comes. Of course, you don’t want to wait too long. You may have a very good reason for wanting to do this.
If you have no self control and continually use your credit card to get in trouble, now is the time to get rid of it. Despite any drawbacks, you need to protect your finances first and foremost. When you no longer have your credit card you no longer have to worry about using it and adding to your current debt.
What about the hit that my credit score will take? The main reason that many people keep a credit card instead of canceling is because they have heard it will negatively affect their credit score. When you get rid of a card you are lowering your available credit limit. In turn, your score is going to dip. But is this really that big of a deal? You need to ask yourself how important your credit score really is. Sure, you want it to be as high as possible but there may come a time when you need to bite the bullet.
One last thought: don’t apply for a credit card unless you are sure that you need it now and want to keep it for the long run. Some people will apply for a card, use it a few times, and then cancel it. This is a mistake. Make sure you consider both the short and long term ramifications before you apply for a credit card.
The above information should be helpful if you are thinking about canceling a credit card.