Dear Liz: I have an 834 credit score, with three credit cards. I don’t carry debt or pay annual fees. I’m considering closing one of my cards and replacing it with one available through my credit union. Is it worth the hassle?
Answer: Closing accounts won’t help your credit scores and may hurt them. If there’s no compelling reason to close a card, you might consider leaving the account open and using the card occasionally to prevent the issuer from closing it.
You also might want to rethink your stance on annual fees. These days, few cards without annual fees offer rewards, while many cards offer rewards that more than offset their fees. If you’re new to the rewards card world, consider getting a simple cash-back card. If you’re interested in travel benefits, look for a card that gives you points that you can transfer to frequent traveler programs.
If you’re determined to close the account and open another, apply for the new card first since the closure may drop your scores.