First off, you should understand that canceling a card won’t do anything to help improve your credit score. In fact, it may even hurt it instead. Because an important component in determining an individual’s credit score is their debt to available credit ratio, canceling a card can lower the amount of credit that you have available. Also, if it is a card that you have had for a long time, canceling it can essentially truncate your credit history.
If your old card carries an annual fee that the issuer won’t waive, then cancelling that card makes sense. Likewise, if you have reached the maximum amount of cards allowable by that issuer and you were intending to apply for a new card from that same issuer, you will likely be asked to close one of your existing open accounts. If that happens, request that your credit line be transferred to your new account. Most issuers can complete this service for you over the phone, so if you are closing one card issued by a certain company in order to open up a new card from the very same issuer, call and speak to a customer service representative about having your old limit added onto the limit of your new card.
Another reason to keep old accounts open is for the awards programs that are attached to them. If certain cards offer good perks such as a higher percentage of cash back for specific purchases, consider attaching a little sticker or post it note to the card outlining its particular rewards before tucking it into your wallet. If you have one card that offers bonus perks for every dollar spent at a restaurant, for example, then you will know which card to choose to settle the bill whenever you dine out. If you have multiple cards it can be easy to forget which is best used for what, so being organized and labeling them somehow is a good way to ensure you take the best advantage of everything your different cards have to offer.