We reported that many credit card companies, such as Bank of America and Advanta, were raising credit card rates on consumers even when they were not late on payments and their credit was still good. Consumers in this situation have been getting the option to opt out of these increased rates only to have their line shut down and when the card is paid off the credit card is closed.
But what happens when your card is closed? Having your credit card closed can lower your credit score. The third most heavily weighed factor in your FICO score is the length of time your accounts have been open. Also, eliminating a card reduces your available credit, which also lowers your score.
If you have a great credit score say over 720 or higher, one closure won't hurt your score much. But if you have a few cards and a slim credit history, it's best to make sure your older cards stay open.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
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