5 times, you must cancel a credit card, according to financial experts
In some cases, it may be better to deposit it entirely from your wallet.
Having a credit card in your wallet may not be an absolute necessity, but it can certainly make your life easier. In addition to being the best payment option for certain purchases, they can also help you to save money When purchasing necessities and providing insurance against theft, fraud or false sellers. But even if you have a good reason to transport it, it does not necessarily mean that you should never get rid of one. Read the rest to learn the moments when you really have to cancel a credit card, according to financial experts.
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1 When he has high annual fees.
At their most basic level, credit cards facilitate payment of purchases without having to transport large sums of money. But in addition to convenience, many memberships offer card holders access to significant advantages. Unfortunately, this is rarely offered free of charge and can sometimes be one of the main reasons to drop a card from your wallet.
"Many cards can charge annual fees, especially those that offer rewards or other advantages," explains Robert Farrington , founder and CEO of The college investor . "If you do not get the value of the advantages, it may be time to cancel the card. For example, you may have changed your spending habits, your travel goals or other options: given That some of these costs could be higher of $ 695 per year, you should really make sure you use the advantages. "
However, cancelling it outright is perhaps not the best option for this scenario. "You could be better served by calling the credit card transmitter to request the transfer of your account to a free card which has fewer or no rewards or money back", explains Riley Adams , a certified public accountant and founder of Young and invested . "This can keep the account open without having touched your credit score which generally comes from the closure of an account while saving yourself on annual costs."
2 When you want a new type of credit card.
Depending on how you spend, it can sometimes be logical to transport several company credit cards to maximize the advantages offered by each. But although this can often be a great way to save money and collect the rewards, it is only so far that you can adopt this sweeping strategy.
"Some credit card companies set limits for the number of cards you may have with them", " Ben Walker ,, personal finances and a credit card expert at Financebuzz, says Better life . "If you are already at this limit and you want a different card, you may need to make a change of product or cancel an existing card to be eligible for a new credit card."
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3 When you have trouble controlling your expenses.
Even if they can be a great way to help organize your finances and rationalize your budget, all credit cards are delivered with an inherent danger: the ability to spend too much. And if you are unable to remember to slide on the items you cannot afford, experts say that it is a clear sign that you should cut yours.
"Credit cards can help you improve your credit score while offering valuable awards and benefits," said Walker. "But they are not worth it if they lead you to an unmanageable debt thanks to uncontrolled expenses."
Others point out that getting rid of a card can always be a good idea if you even feel the desire to make a shopping trip. "If having an open credit line makes you anxious and gives you the temptation, close it," said Chris Ratigan , financial expert and vice-president of business development to Monterey financial services . "The option falls, and that's when you really start to be selective with your purchases:" Do I really need this or is it a great need? ""
4 When you are dealing with a problematic joint account.
Married couples generally share everything, from their home to bank accounts with each other. But if you plan to cut links with your significant other, you may want to consider dropping common cards as well as change Netflix password . AE0FCC31AE342FD3A1346EBB1F342FCB
"In cases where you have experienced a change in the matrimonial state, it may be logical to cancel the credit cards that you have shared jointly," said Adams. "Because your union has dissolved, you will probably not want to share a joint credit card with your ex-spouse."
But in addition to ruptures, this can also apply to any offspring learning the ins and outs of responsible spending. "If you have your teenager attached to your account and abuse the credit line, remove your name and start them again," explains Ratigan. "No one wants to pay someone else's expenses, especially if it doesn't benefit you."
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5 When you already have a well -established credit history.
Stay above your credit rating Can be confusing, mainly thanks to the mysterious and apparently contradictory rules of the system. But if your number is already in a good place, there are cases where you can probably get out of it by abandoning a card that you no longer want or that you no longer need.
"You may want to cancel a credit card because you are fed up with the transmitter or just have too many cards to juggle," says Walker. "As long as the card you want to cancel is not one of your oldest credit accounts and you already have a high credit rating, you should not see a significant impact on your credit scoring to cancel a map."
Best Life offers the most up -to -date financial information for high -level experts and latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.
