Personal Finance

Is it a good idea to close accounts?

  • Last Updated:
  • Nov 28th, 2005 12:43 am
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Dec 24, 2004
10708 posts
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Ragnaros wrote:okay thanks for answers

and is this same for credit cards?

i have some credit cards that only have $500 limit
i tried increasing the limit but got declided due to forgeting to make a payment one time

i want to close 2 of those from visa that only give me $500.

will that somehow make trouble?
Closing bank accounts will NOT affect your credit rating in any way as long as you pay up all the NSF or whatever fees you owe the bank.

Closing credit cards WILL affect your credit rating.

You should ONLY close credit cards if:

a) there's a disgusting annual fee, such as $120/year for Aerogold or $99/year for Gold Elite
or
b) you have no self control over spending

The reason for this is because having a credit card even if its a tiny $500 limit you don't use counts as an open trade line on your credit report. Having more trade lines makes you a better credit risk, as long as you never carry a balance of more than around 30 to 50% of the credit limit per card.


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