Credit cards pose to be a big problem to customers when they have amassed so much credit that they are not able to repay it. Due to the non-repayment of their dues, these cards become delinquent. Customers feel that the best way to overcome this problem is by closing the credit cards that they are not able to manage any more. However, this can be really detrimental. However, most often than not, closing cards that are in the delinquent stage will hamper your credit history rather than helping it. Hence, let us take a look at the cards that you should not consider closing.
First of all, do not close any credit card that still has dues on it. When you close the card that has a balance, it will reflect a $0 credit limit. This can be detrimental because it gives the impression that you have utilized the entire amount on the card. The dues on the cards account for 30% of the score on your credit report and having a maxed out card can have a drastic negative impact.
Do not close the credit card that has some of the best terms and conditions on it just because you have utilized so much on it that you cannot repay. Instead talk to the bank officials and find a solution to clear off your debts. The cards that are available in the finance market today have strict terms and conditions and the qualifying criteria are very rigid.
Refrain from closing the credit card that you have been holding from a long time. Closing these cards will shorten your credit history. When applying for loans or mortgage or another credit card, banks and other financial institutions will consider the people with short credit histories to be riskier than people with longer ones. Though the impact of closing these cards will not be reflected immediately on your credit report, it is imperative to avoid closing them since they will pull down your credit score when they finally show up on your report a few years down the lane.
If you have just one credit card with you, never ever think of closing it. It is easier to try clearing off the debt on this card rather than closing the card and applying for a new one. The chances of the new card getting approved will be bleak if you don't have a good credit history to your backing. Rather than not having any card, it is better to hold on to the one you have on hand.