Does canceling a charge card affect your credit score?

Does canceling a charge card affect your credit score? Q. I received a notice saying that the annual fee on my American Express Rewards Gold Card will be going up and that I have a right to reject this change and cancel the card. Will canceling hurt my credit score? —B.D., Fairlawn, N.J. A. Canceling a credit card can affect your credit score because it can increase your credit-utilization rate, which is the percentage of your revolving credit that you are using at any given time. If you have, say, $25,000 in available credit across your credit cards and your current balances add up to $5,000, your utilization rate would be 20 percent. If you cancel a card, that rate could rise because you’d have access to less credit. Generally, a lower utilization rate is better for your FICO score. But the American Express Rewards Gold Card is a charge card. (There is no preset spending limit, and the balance needs to be paid in full every month.) Charge cards don’t affect your credit-utilization rate, so the impact of canceling the card is likely to be small. Have you cancelled a credit or charge card and noticed a difference in your credit score? Comment below.  Consumer Reports has 11 tips to improve your credit score. Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2015 Consumers Union of U.S.

Subscribe now! Subscribe to ConsumerReports.org for expert Ratings, buying advice and reliability on hundreds of products.

Update your feed preferences

from Consumer Reports http://ift.tt/1g7zK2Q via dryer vent cleaning jacksonville fl
from Tumblr http://ift.tt/1K3n4Sd