Does canceling a credit card damage your credit rating?

[bluestateguy]

I would like to sever all ties to Bank of America. I have a CC with them (formerly an MBNA card). It has been paid off for years, and I never use it, so this would be a symbolic move. But would canceling the card hurt my credit rating?

[Aristus]

1. If it's paid off, it shouldn't hurt your credit rating. But it might help to keep it open, though.

It increases your available credit rating on your report.

[LeftyFingerPop]

2. I know that a large portion of your FICO score...

is based upon a ratio of your total credit outstanding to your total available credit. Therefore, if you remove some of your available credit by officially canceling, then that ratio becomes worse, thereby potentially impacting your FICO score in a negative manner.

I am only basing this on what I have heard over the years...perhaps someone else will chime in.

All other factors being equal, if it were me, I would just keep the card and not use it.

[KamaAina]

11. But is it worth it if the card has an annual fee or other hidden charge?

Mine that I just canceled socked me for 70 or 80 bucks each year for some bogus credit check, so they could say "No Annual Fee!" :grr:

[Rob H.]

3. Based on what I've heard it won't

but I've been told that a person should make it very clear to the credit card company that he wants the card listed as "canceled at cardholder's request." If you do that it'll be clear to anyone looking at your credit history that they didn't stop doing business with you (which would make it look as if you're a bad credit risk), you simply gave them the boot.

[LeftyFingerPop]

4. Yes, that sounds correct...good point. n/t

[old mark]

6. I agree with this. Let them know, and you are OK -

we cancelled 6 cards several years ago when I started thinking about retiring, and our credit rating os fine, have steadily been getting card offers right through the crunch.
The only 2 cards we have left are bank cards, related to our accounts.
Don't miss the others at alldon't plan on any more.

mark

[MajorChode]

5. It could possibly

If you have many credit accounts that you're not using, it may be a good idea to close some of them. However creditors also look at your credit to debt ratio.

http://www.debtsteps.com/credit-to-debt-ratio.html

[Tuesday Afternoon]

7. Closing at your account at your own request, right? Paid In Full.

I would think this is a good thing. :shrug:

[Deja Q]

8. If it's your oldest card then, yes, it will damage it.

Maybe not by much - but I thought about doing the same to a Visa I virtually never use.

It's better to use it, pay it off, and put it away, then use it again. Keep it open.

Newer cards, as long as they're paid off beforehand, it's not as much an issue.

[KamaAina]

9. Friendly tip: When I called to cancel one recently, the guy offered me a lower rate

that wasn't why I canceled; for some reason (not nonpayment), the card was being declined sporadically, leading to a feud with my ISP, so I got another card.

But if any of you out there in DUland are seeking lower rates, it might be worth a try.

[Midlodemocrat]

10. Yes. Leave it open, just don't use it.

[applegrove]

12. If you use it and pay it off each month it helps your credit rating. I think if you cancel it

it doesn't hurt but it doesn't help either.