Many customers closed credit card because there are too many delinquent. They believe by closing a credit card will make mischief is lost. This is not going to happen and it will be bad, cover the full delinquent credit card will hurt your credit score. Here are four reasons for not closing a credit card and keep their credit cards remain active.
1. Do not close credit cards that still have bills
When you close a credit card that contains the bill, the total available credit and credit limit reported as Rp.0, -. Because you still have to use a credit card with no credit limit that can have a negative impact on your credit score because the ratio of credit to the level of credit card debt (including other loans) is 30%.
2. Do not close the only credit card in your possession that still have available credit limit.
Closing this card will reduce the value of the total available credit and, in turn, improve the utilization of total credit. Just like closing a credit card with a balance, closing one of balance can also affect your credit score, because you've spent all the credit available to you
3. Do not close credit cards longest (member since) owned.
Closing old credit cards will shorten your credit history. lenders tend to view borrowers with short credit histories riskier than borrowers with decent credit history length.
4. Do not close credit cards with the best deals.
Why let a good thing to go away? If you have a credit card with a low interest rate, no annual fee, and other facilities such as travel insurance, keep them. A credit card charge less while doing much better deal than a credit card charge is more expensive.
When At The Right To Closing Credit Card?
There is no problem to close a new credit card that you no longer use the card as long as it has no use and you have another credit card. Or you may cover the credit card suddenly raise interest rates or annual charge. Your credit card issuer may close a credit card for you if you decide to reject the new credit card charges. As well as in case of identity theft and fraud, credit card issuers would advise you to close a credit card to avoid thieves do more activities that harm you.
Closing Credit Card Correctly
Always close a credit card by sending a written notification to the credit card issuer. You can call ahead to cancel the account but always follow up with a confirmation letter regarding your desire to close a credit card. Follow up is very important to make sure your credit card has been reported to have "Closed" on the credit report. It's not necessarily going to hurt your credit score if the credit card continues to be reported "Active" but will double-check to make sure your credit card is already closed.
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