NEW YORK ( MainStreet) — You've probably heard this advice: never close a credit card account. It will negatively impact your overall credit score. The age of your credit history is important, as is the amount of available credit. But how accurate is this advice? Is there ever a reason to close a credit account? You might be surprised to find out there are times when closing your credit cards can be a good thing.
Do You Have an Account With Fees?
Mike Sullivan, director of education with Take Charge America, notes that not all cards are just sitting there aging your credit like a fine wine. "I closed one account because it was costing me $250 a year." In fact, high-end travel and other rewards cards often come at a very heavy price. "If it's expensive and you're not using it, cancel it."
No matter what you’re paying, it's not worth what it's doing to your credit score. But before you close out the account, give the customer service department a call. They might be able to work out a deal and waive the fee for a year.
Has Your Card Been Compromised?
"If you've had false charges put on it, the easiest way to deal with that is to cancel the card," Sullivan said.
Why not just order another card from the same company?
"If they're not protecting you and watching your back, just close it,” Sullivan says. Before you cancel for this reason, ask yourself if it's the company's fault. For example, a big box store getting hacked is on them -- or more likely a third-party security firm -- not your credit card company.