This is probably the second more frequent question I get, behind only “How does this affect my credit score?” It may seem like an easy topic to cover, but there is more than meets the eye. If you made me boil it down to one sentence, I would say, “It depends.” Not what you were hoping for, is it? Let’s dive in…

3 Reasons to CLOSE A CARD:

1. The annual fee
When you look at the annual fee, you simply need to look at the value you get with the card. For example, the Marriott Bonvoy Boundless Visa Signature card has a $95 annual fee, but you get a free hotel night award (up to 35,000 points) every year you own the card. So if you have a lot of Marriott points built up, I probably would not renew the card. But if I was low on Marriott points and knew I would be needing a hotel stay in the upcoming year, then it would be pretty easy to keep the card for another year. Ask yourself, “Are you going to get value for the fee you’ll pay?”
2. To enable you to earn the signup bonus again
Most cards have a 2 year window from when you last received their signup bonus before you can receive it again (as of January 2019, the Chase Sapphire cards have extended that window to every 4 years). It may seem like a long-term play to close a card in order to apply for it again a couple years later, but remember it is the signup bonuses on these cards that give you the best bang for your buck.
3. Less cards to keep track off
You may not feel comfortable keeping a bunch of open cards in your possession. There is chance of fraud with that card or maybe physically losing them. Sometimes people just want to close an old card when they start using a new one.

3 Reasons to KEEP A CARD OPEN:

1. Your credit score
One of the factors that determines your credit score is the average length of all your credit lines. This average length makes up only 15% of your credit score, so when you close a credit card, especially one that you’ve had for a while, you will see a small dip in your credit score.
2. The perks of the card
The reason most people get Travel Reward credit cards is because of the amazing perks that come with each card. Whether it is free hotel nights, or priority airline boarding, or airport lounge access, or cash back, they are tough to say good-bye to once you realize how sweet they are. Sometimes the annual fee is well worth the extra perks.
3. You can still use it
Most branded travel credit cards like Southwest, United, Marriott, etc. give you extra points/miles when you use their card on their products. For example, the same Marriott Bonvoy Boundless Visa Signature card mentioned above gives you 6x points for every $1 you spend at Marriott. You never know when you will need to use it and therefore some people keep it stored in their wallet until they do.

Tips To Canceling Your Credit Card:

I know you don’t want to hear this, but you need to make the call. Most people don’t look forward to making the dreaded phone call to cancel your credit card because you know the person on the other end isn’t going down without a fight. Here are some scenarios that might happen when you call:

1. They offer to downgrade your card to a similar one with no annual fee. This can be good as you get to keep this line of credit open, but the perks or rewards will certainly not be as good.
2. They offer to give you a one-time statement credit to cover the cost of the annual fee. No wasn’t that worth the 10 minutes of your time to make a phone call?
3. They let you cancel your card. Whoa! That was easy.

Common Phone Numbers To Cancel Credit Cards:

American Express: (800) 528-4800
Bank of America: (800) 732-9194
Barclays: (866) 928-8598
Capital One: (800) 227-4825
Chase: (800) 432-3117
Discover: (800) 347-2683