Credit cards

Should you deposit your old credit cards?

RICHMOND, Va. (WWBT) – Experts always tell you to keep all your old credit cards open. Even if you don’t use them. But is there a time when you should close them?

Having a credit card for a long time helps your credit score. Older credit cards, even with no balance, increase the average age of your accounts, which improves your credit score.

Sara Rathner, personal finance expert at NerdWallet, says that if you close an old card, it could drop your score by a few points. This is mainly because it reduces your total available credit limit.

Rathner says that in general, experts recommend spending no more than 30% of your total credit limit in one billing cycle. Even less than 10% is ideal. So if your credit limit is suddenly lowered but your spending stays the same, it’s that much easier to overspend.

“That being said, if you don’t want to pay an annual fee on a card. if you don’t get any more value out of it. You want to make room in your life for another credit card. you can consider closing the old map,” Rathner said.

Especially if you are charged an annual fee for a card you rarely use. If so, before you close it, call the company and see if they can move you to another card – free of charge.

Copyright 2021 WWBT. All rights reserved.

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