It’s a problem that many card holders have faced lately: interest rates are increasing across the board, even for long-time customers who’ve never missed a payment. When faced with such a situation, card holders have two choices. They can keep the card and agree to the higher rate of interest, or they can close the account and pay off their balance at the previous low rate.
It’s not a choice many people are happy with, especially since closing credit accounts can affect your FICO score. But experts insist that closing the account won’t do much harm to your credit score, since your credit report will keep the history of that account for several years after it’s closed. Since the length of your credit history is one factor in your overall credit score, this is welcome news to card holders who want to dump their high-interest cards.
One warning: as credit standards continue to tighten, it might be difficult to get approved for another credit card, especially at a low interest rate. If you only have one or two cards and don’t plan to carry a monthly balance, you might be better off keeping your accounts open for now.
No comments:
Post a Comment