Credit Card Closure: When should you be closed, credits, what are the things to keep in mind? – When to close credit card and how to protect your credit score

Credit card closure: Credit cards have become a part of our life nowadays. These give us the convenience of spending in borrowings, provided we pay on time. But if you want to close your credit card for some reason, then definitely think once. Because it can also harm you. Let us know when to close the credit card and what to take care of.

Is it right or wrong to shut off credit card?

Financial experts believe that closing credit cards is not always wrong, but it should be done thoughtfully. If you turn off an old card, which has high limit, then your credit score may fall. The reason for this is that this makes your credit history smaller and the credit utilization ratio increases.

Now people are a little careful about spending. This time the loan of credit card has also increased less than last year, and the expenditure has also decreased slightly. It is considered a good sign.

When should the credit card be discontinued?

• If the annual fee of the card is high, and in return you are not getting any major benefit.
• If you spend more than necessary with that card, due to which the debt is increasing.
• If you have a lot of cards, which have become difficult to manage.
• If there has been a big change in your life, such as divorce or separation from partner, it may be necessary to close the joint card.

How to reduce the effect on credit score?

1. Pay all the outstanding amount before closing the credit card.
2. If possible, transfer the limit of that card to another active card.
3. Do not close several cards simultaneously, otherwise the credit score may be shocked.
4. Keep the old card running, as long credit history strengthens your image.
5. After closing the card, check your credit report whether everything was updated or not.
6. Do not waste the reward points even by mistake. Be sure to redeem them before closing the card.

Keep these things in mind before doing credit card

Closing credit card is not a small decision. If you do it in the right way and time, it can maintain a balance in your financial life. But the decision taken in haste or without thinking can affect your credit score and the ability to take future loans. Therefore, you can also consult an expert before closing the credit card, so that there is no doubt in your mind.

Also read: Use Credit Card carefully, if this mistake is made, credit score will deteriorate