One of the benefits to opening a new credit card account is that with every dollar of credit you receive, you may be eligible for a higher credit score. If payments are made on time, a large amount of available credit can help increase your credit score. Unfortunately, many people are now struggling to make minimum payments on their credit cards. Those who are able to pay off their credit cards may decide to cancel their accounts, but doing so can have some negative consequences.
The Effects of Canceling a Credit Card
You should carefully weigh your options before calling to cancel your credit card. In some cases, simply not using your card may be a better option than canceling the account altogether. If you have made payments for many years, canceling the credit card may erase this positive credit and negatively affect your credit score.
Therefore, if you have a credit card with a $10,000 limit and no balance, it may be in your best interest to keep the account open. The responsibility lies in using the card wisely. However, if the card has an annual fee or an inactivity fee, it may be more beneficial to close the account or switch to a card without such fees.
If you are having trouble making your credit card payments in a timely fashion, it is time to take action. The knowledgeable Milwaukee bankruptcy attorneys at the DeLadurantey Law Office, LLC, can help you understand your options for seeking debt relief and a fresh financial start. Contact us today at 414-377-0518 to schedule a free consultation.