d asked in Business & FinanceCredit · 1 decade ago

Should I cancel credit card with high interest rates?

Keeping credit cards with high interest rates seems silly, when I am getting low introductory rates, and relatively low rates in the future. Will this change my credit score?

10 Answers

  • Anonymous
    1 decade ago
    Best Answer

    keeping a credit card with 0 balance actually helps your credit more, so I would say keep them, just do not use them.

  • 4 years ago

    Contrary to popular belief, there is no direct negative impact to cancelling. Cancelling does immediately reduce any positive impact that the card might be having (and eventually eliminates any positive impact that the card might have). This is mainly an issue when it is a very old card and cancelling reduces the "age" of your credit history (the age of your oldest account that is still open) or reduces the average age of your open accounts. Because the card is only two years old, you do not have to be considered about this problems. The most significant impact of keeping the account open with a zero balance is that the credit is available to you. If you have too much credit available to you, this is a negative impact (and closing would have a positive impact). If you are maxed out on your other cards, then keeping the amount of credit available to you larger than the amount that is in use (by keeping this account open) will have a positive impact and closing will have a negative impact. So it could really go either way.

  • 1 decade ago


    To answer your question, you should ask yourself these other questions.

    1. Will I carry a balance on this card for more than 29 days.

    2. Does this card offer me benefits that my other cards don't,

    ie; travel and cancellation insurance, purchase protection.

    3. Is there an annual fee.

    If it's a store card get rid of it, avoid the extra 10 - 15% ddiscount if you sign up now trap. Just ask them when are they having a sale.

    If you don't have what it takes to resist, use a low bearing interest card (10- 15%)

    Unless the card is offering travel and cancelation insurance, you don't need it.

    Be careful of low intruductory rates especially after the grace period when you might have to carry a balance at a rate of 18-28%.

    Not paying your minimum monthly payment, and carrying a balance grater than 75% of the limit, and constant credit seeking (more than 6 per year), collections, proposals, any of these combination will dramatically decrease your credit rating.

    Hope that was helpful.

  • Anonymous
    1 decade ago

    CeeBee's answer is best so far....it addresses whether you are paying an annual fee. If so, then first contact the credit card company and tell them to drop the fee and lower your interest rates, or you will cancel it. If they still won't work with you, follow through. It makes no sense to pay fees on a card you are not using.

    But it is true you will hurt your credit by canceling the card. I suggest you keep it open but do not use it since there will be no cost involved (unless you are paying the annual fees). I would recommend that you use the card for a minor purchase (gas or groceries for example), then pay it off to avoid the interest fee. You will maintain the card on your credit history that way.

    But definitely contact them to complain! If you have a good history with them, point that out! Many times they will lower your rate.

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  • 1 decade ago

    If you've had the cards for a while, don't close them. When you close the card, you close the history.

    A big part of your score is pased on the revolving credit debt to available limit ratio. If you carry a balance on credit cards, closing a credit card will lower your available limit which will make you balance a higher percentage. Carrying balances of more than 30% of your limit will hurt your score.

    Best thing to do is pay off all the credit card balances. Then only charge what you can afford to pay in full each month.

  • 1 decade ago

    Cancel all of your cards. People obsess with the credit score thing. Pay as you go and you will come out ahead.

    Banks spend millions brainwashing people into thinking they need a credit card and a high fico score to make it in todays world. That's bull. Today is no different than yesterday.

    Credit cards (Banks) make all the rules and they change the rules anytime they want to. Play with snakes and you will get bit.

  • Anonymous
    1 decade ago

    If you're not going to use the card because of the high rate, either close the account or call and tell them to lower the rate or you'll take your business elsewhere. I have 1 master card that is good in any store so why would I need another?

  • 1 decade ago

    You should pay the balance off, but leave the card open... the more credit you COULD use... the better your credit score becomes. Keep the card open, just dont use it.

  • 1 decade ago

    Yes why not, but make sure you paid your balance in full before calling them for cancellation.

  • Anonymous
    1 decade ago

    no but cancelling could hurt it!!!

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