Prior to the 20th-century, there were no credit cards, so the issue of credit card debt was wholly nonexistent. Gradually, however, credit cards came to be something of a central fixture in the financial lives of many Americans.
Store-issued cards and those issued by credit card companies or financial institutions have served as a way for some people to make ends meet, and for others they have represented a shortcut to a standard of living beyond one’s regular and actual income. The ease of access to credit cards in recent history and the increased reliance on them has left some people in the position of being unable to pay the debts that they have incurred.
How a Seemingly Helpful Action Can Hurt
Your credit score is one of the most influential factors when financial institutions, landlords, or other decision makers are considering the fate of an application that you have submitted. Because it is such a significant measure, it is important that you avoid taking actions that might negatively affect your credit score. When you choose to close a credit card account, it can have the following negative impacts:
- Shortening the length of your credit history
- Denying you the opportunity to make regular and timely payments in an effort to rebuild your credit
- Lowering your overall credit limit and thereby increasing the ratio of debt to available credit
In an effort to do the right thing and to repair a damaged financial situation, a debtor may make a concerted effort to pay off a credit card. But it is important to resist the temptation to immediately close a credit card when it has been paid in full. To learn why, or for help with an unmanageable debt load, contact the Milwaukee bankruptcy lawyers of the DeLadurantey Law Office, LLC at 414-377-0518 to speak with a skilled and experienced attorney about your situation.