How to Handle Old Credit Card Accounts. If you have an old credit card account, you should not close it down for so many reasons. Old credit card accounts can come in handy when you really need them, but if you close them, that opportunity is gone forever.
Today we are going to be taking a look at how to handle old credit card accounts. That’s not all, because today we are also going to be looking at reasons why you should keep your old credit card accounts.
How to Handle Old Credit Card Accounts
If you have been using credit cards for some time, you might have an old credit card that you rarely use. One of the reasons for this might be that you already have a better credit card that you frequently use. One of the things we would not advise you to do is to simply close down your gold credit card account but to know how to handle it.
Your financial awareness is one of the things that you need to keep an eye out for because it is either a turn-off or a turn-on for financial institutions. Handling your old credit card account properly has to do with your financial condition. Many people think that closing down their old accounts they do not use is a good idea. But the truth is that it is not a good thing or is not recommended to close down old credit card accounts.
Should you keep an Old Credit Card Account Open?
So many credit cards are used that people always wonder if it is a good idea to keep an old credit card account open. The answer is always the same: it is a good thing and it will benefit you to keep your old credit card account open. If you have an old debit card that has an annual fee, you can simply ask your issuer to downgrade it to a $0 annual fee.
The reason why it is good to keep all the credit cards is that you can still use them for small purchases, thereby keeping your account activity open. When your account activity is open, it will continue to be shown on your credit report, thereby building up your credit score. But when you close the account, it will reflect on your credit history automatically.
Reasons to Keep our Old Credit Card Account Open
There are so many reasons, as I have mentioned in the introduction of this article, why you should keep your old credit card account open. Some of the reasons are listed below:
- One of the major reasons is that closing an old credit card account impacts your credit utilization ratio. Your credit utilization ratio is the amount of available credit you are making use of. If you use below 30%, then it is good for your credit score.
- It impacts your credit history negatively. When you close an old credit card account, your credit history, which comprises 15% of your credit score, drops. This means that your credit score dropped as well.
- It makes you lose credit for all the years that you have been keeping up with timely payments. Instead of closing down old chemical accounts, you should simply upgrade them so that you do not lose all the good credit card history you have built with the issuer.
- You will miss out on benefits. Many old guard card accounts come with benefits, so if you decide to close down your account today, then you have lost all the benefits. which is another reason why it is advisable to keep old credit cards.
Use old credit card accounts to pay bills.
As long as an account is no longer infrequently used, people might forget that they have a credit card account that is still open. In this article, we have emphasized how important it is to keep your old credit card account open and manage it. To avoid forgetting that you have an old credit card account, one of the things you need to do is to use it to pay a regular bill.
Paying a regular installment on a build-your-own chemical account is one of the best ways to manage old credit card accounts. The reason for this is that so that you do not forget that you have an open old credit card account, you should entrust it to the payment of a bill.
When can I close my Old Credit Card Accounts?
In this article, we have seen a lot of instances where it is very important that your old credit card account should not be closed down. However, there is still a question that we must ask ourselves. This question is whether it is okay to close down an old credit card account. In many cases, you should not close down your account, but there are exceptions where you can simply decide to do so.
Closing down an old credit card account is a good thing if you have a problem with overspending, which gets you into credit card debt. Another instance where it is okay to close down an old credit card account is when you have a better credit card with lower fees.
Finally, if you have a strong credit card history that reflects on-time payments and responsible money management, closing down your credit card account will not affect your credit score.
How to Handle Old Credit Card Accounts FAQs
What should I do with an old credit card account?
If your credit card is an old credit card account and you are no longer making use of it, you should still use it for payment of bills. However, if the credit card plastic has expired, then you can simply cut them up and toss them in the trash. Although it is not encouraged to close old credit card accounts, because it will negatively impact your credit score.
Is there any reason to keep old credit cards?
There are many reasons to keep your old credit card, one of them being that closing it down will impact your credit score. Closing down a credit card will also increase your credit utilization ratio, which is not good for your credit score and history. These are some of the best reasons why you should not close your old credit card accounts but manage them.