Wanda Wilkinson

Wanda Wilkinson
Phone:
608-219-8480
Mobile:
(608) 219-8480
Fax:
(608) 831-0825

Email

Many people are faced with credit card issuers changing the “original terms” of the credit card agreement such as increasing the rate, lowering the limit, or a combination of both.  When this happens, we are emotionally compelled to end the relationship with the credit card company by closing the account.  Here are three reasons not to close the account:
 

1.      The damage to your credit scores.  It is not the act of closing the account that hurts your scores, it is the sudden loss of the available credit that the card provided.  Even if it your limit had been lowered, it is still better than having no available credit.
 

2.      You lose access to capital.  Credit cards offer us access to “borrowed money” in a convenient fashion.  If you close the account, you lose the availability to this capital.  Now, more than ever with the state of our economy, this is an important thing for consumers to have.  In addition, once you close the account, there is no guarantee you will be able to re-open a new account elsewhere…
 

3.      Closing an account may cause other credit card issuers to do the same.  If one credit card issuer sees the actions made by another caused you to close your account, they may do the same thing if they want you to close your account as well.  This may even cause another card issuer to simply close your account on their own, further hurting your credit.