There are many reasons why you may want to cancel your credit cards, including an expensive annual fee, high interest rate, few benefits, infrequent usage, or you have transferred your balance to a new card. However, before you cancel your credit card, you must understand the consequences of doing so even if you have a genuine reason.
Canceling credit cards may affect your credit score, so make an effort to manage your cards rather than close them.
Factors That Hurt Your Credit Score
These factors influence your credit score:
- The payment history (35% of the credit score)
- The number of credit accounts or amounts owed by you (30%)
- The length of your credit history (15%)
- Recent credit inquiries or the number of recently opened credit accounts (10%)
- Number, types, and size of credit accounts (10%)
Learn more: How Canceling Credit Cards Will Affect Your Credit Score
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