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Bad Credit Credit Cards

by Isabella Craig on 2013/12/01

Should You Close Your Bad Credit Credit Cards?

Some card holders think that they should give up bad credit credit cards when they have maxed out their limit, without realizing that they can hurt their credit score more than they want.

If you are one of those who are deeply contemplating giving up your credit cards, think twice before you make that call and request for your account to be discontinued.

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Before closing out any of your bad credit credit cards and make matters worse for your credit score, here are some of the reasons why you should not let go of your credit cards that easily.

    You will lose your credit history. Despite your current bad credit, surely you were not associated with poor credit from when you’ve started using a credit card. Closing an account or a credit card will disregard even your previously good credit history. Closing down a card will only mean that you have repeatedly failed to make necessary changes to improve your payments and will only hurt your score further.

    You will lose one of your credit lines. A big chunk of the credit score is based on your credit utilization ratio. If you close down one or more credit cards, you will lose a portion of your credit line or the total amount of credit available to you. This can then result to a lower credit score.

    Negotiate for a better deal instead of closing an account. Some people eventually fix their credit scores by paying off all of their debts using their bad credit credit cards. When this happens, they may actually deserve better rates than what they are currently getting. Negotiating for improved rates is always a better option than discontinuing an account.

If you think that one of your bad credit credit cards is only accruing too much interest expense than you can handle and is really hurting your budget and payment plan, you can always opt to close it down. Just make sure to keep those you have had the longest.

Finally, buffer your credit utilization ratio and prevent it from going up by paying for some of your existing debt if you really need to close one of your credit cards to avoid sudden drop on your credit score.

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