Closing an unused card could hurt your credit score

You have a credit card that you never use. Does it make sense to keep that account open or should you close it?

John Ulzheimer, president of consumer education at, says if that account you plan to close has a very high credit limit you could actually lower your credit score by doing that.

"Credit scoring models like to see a lot of available unused credit limits on your credit cards. And by closing a credit card, you essentially take that limit out of the measurement equation. It can actually backfire and cause your score to be lower."

That's not to say that you should never close a credit card account. Just realize that it could have a negative impact on your credit score.

"And I would not suggest doing it right before you're applying for something like an auto loan or certainly a mortgage."

Because that could result in a higher interest rate or having your application denied.

By the way, if you don't use a card for a while (a year or so), the bank might cancel your account which would have the same effect on your credit score.

For more information

When Is It Okay To Close One of Your Credit Cards?