The first thing you need to focus on is getting that credit card paid off. The lower your balance is the less it will hurt your FICO credit score if your card is cancelled.
A couple of things happen when your card is cancelled:
1. How it will affect your debt to credit limit ratio, which we have talked about before.
2. What will happen to the interest rate on your unpaid portion of the balance.
When you have a credit card that has a balance on it and is cancelled the credit card company will normally raise your interest rate up to as much as 30%. If this happens and you only pay the minimum payments you will never get out of debt.
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