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3 Times It's OK to Close Your Credit Card

If you do decide the card has become too costly, you should check with your issuer to see if they have a no-fee version of the card you can downgrade to. This will help keep your credit utilization ratio intact as well as maintain any points you were getting from having an ideal number of credit cards.

Your card has been compromised.
Credit card fraud has become more and more prevalent these days, and sadly it's in the cardholder's best interest to close an account before the hacker can wreak havoc with it.

Fortunately, what financial institutions typically do in the instance of fraud (or the threat of fraud) is close the account and immediately replace it with a card adhering to the same terms and conditions as the original. This means the cardholder's credit utilization ratio remains the same and the credit score remains intact.

Your issuer won't lower your APR.
Contrary to popular belief, a credit card's accompanying annual percentage rate isn't set in stone. Savvy customers can often get their issuer to lower their current rates by using an improved score or credit card solicitations they've received in the mail as a bargaining chip. If your issuer is being a stickler, you may want to close the card and open a similar one with another issuer offering a lower interest rate.

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