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I recently received a notice from my credit card company that my interest rate will be increased. I've already applied for another card from a different lender. I've had this card card for over 15 years, never late, always paid off in full.
However, I plan on closing this card now as there will be a hike on the interest rate. However, I don't know how this is going to impact my credit score. Should I close it or should I keep it open with a zero balance for awhile. How long should I keep it open or can I close it right away given my history without any adverse reaction to my score?
When should I close the card
Hi Riley,
If you close this account, this is going to affect your credit negatively. This can lower your credit score. Moreover, after sometime of closing this account, all the payment history will be lost along with the tradeline. So, you should think twice before closing this account. If you owe nothing on this card now, then let it stay as it is.
For now, you can use the new card you have applied for. The interest rates go up and down, so if the interest rate ever goes down sometime in the future, you will be able to use the old card again.
Thanks,
Aaron