Should You Cancel an Unused Credit Card?

Credit cards have become an integral part of our financial lives. They offer convenience, flexibility, and numerous rewards and benefits. However, it’s not uncommon for individuals to accumulate a collection of credit cards over time, some of which may end up rarely used. This begs the question: should you cancel an unused credit card? While the answer may seem straightforward, there are several factors to consider before making a decision that could potentially impact your credit score and overall financial health.

Ultimately, It Depends

the decision to cancel an unused credit card depends on your individual circumstances. If you have a long credit history and a good credit score, it may be beneficial to keep the account open to maintain a strong credit profile. On the other hand, if you’re facing financial challenges, have accumulated significant credit card debt and wondering can credit card debt be forgiven—or have no immediate need for new credit, canceling the unused card may be a viable option. Ultimately, the choice should align with your long-term financial goals and priorities.

The Impact on Your Credit Score

Canceling a credit card will cause a direct hit to your credit score. This is because one of the key factors that determine your creditworthiness is the length of your credit history. Closing an old, rarely-used credit card will shorten your credit history, potentially lowering your credit score. Additionally, canceling a credit card could also impact your credit utilization ratio, which is the percentage of available credit you’re currently using. A lower credit utilization ratio is generally viewed more favorably by lenders. Therefore, if you have substantial credit card debt on other accounts, canceling an unused card could increase your credit utilization ratio and negatively affect your credit score.

The Importance of Managing an Unused Account

Correctly managing an open, rarely-used credit card may require some extra attention, but the added effort will help your credit in the long run. While it may be tempting to close an account that is no longer in use, keeping it open can be beneficial for your credit score. To ensure that an unused credit card remains a positive factor in your credit history, it’s important to monitor the account regularly for any fraudulent activity and ensure that the issuer is reporting accurate information to the credit bureaus.

Maintaining a Low Balance

If you decide to keep an unused credit card open, it’s essential to maintain a low or zero balance on the account. Accumulating debt on an idle card can lead to financial strain and potential damage to your credit score. By making occasional small purchases and promptly paying off the balance, you can keep the account active without accumulating unnecessary debt. This strategy demonstrates responsible credit management and can contribute positively to your credit history.

Consider Your Long-Term Goals

While credit scores and financial health are crucial considerations, it’s essential to assess your long-term goals before making a decision. If you have plans to apply for a mortgage or a loan in the near future, maintaining a higher credit score becomes paramount. In such cases, keeping an unused credit card open may be advisable. However, if you are confident in your creditworthiness and have no immediate need for new credit, closing the account could simplify your financial life and reduce the risk of potential identity theft or fraud.

Huynh Nguyen

Huynh Nguyen is the head of this organization. You can get in touch with me by emailing

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