Yes, it can affect Credit Utilization as well as Credit History. Credit utilization measures how much is owed relative to the total credit limit. Low credit utilization suggests a borrower is not over-leveraged and can keep up with payments.
Cancelling a credit card causes the total credit limit to decrease and may cause the reported credit utilization ratio to rise. That could negatively affect your credit score. The impact on the credit utilization ratio is usually more pronounced if a card with a high credit limit is closed or there's a large balance owed on other cards.
You might consider increasing the credit limit on the credit card you want to keep before cancelling the card you don't use anymore. This way you keep the amount of available credit, keeping the utilization ratio down.
Credit history. Many financial experts recommend keeping the oldest credit card, especially in cases where you've had a card for many years, but have had the new card for only a short while.
Post a comment