In the current era, both the importance and need of credit cards is increasing. At present, the demand for credit cards is also increasing continuously. The advantage of credit cards is that you can make purchases even if you do not have money. Not only this, you also get cashback and reward points benefits on transacting with a credit card. Many people have more than one card. And many times people also get the card closed when it is not used much. In such a situation, today we will know whether closing the credit card is beneficial and how harmful it is.
These are the disadvantages of closing the credit card
- If you close a credit card, it simply means that the use of all the other cards you have will increase.
- If you keep your credit card active, it will not affect your credit score and you will be able to easily maintain your utilization ratio.
- Closing the card can have a negative impact on your credit score. Your credit score can go down.
- If there is no annual fee or renewal fee on your card or it is a lifetime free card, then closing the card can be harmful.
- This card can also help you in case of sudden increase in expenses.
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Closing the credit card will be beneficial in these situations
- If you have to pay fees for your card and you are not using it much, then in such situations it is wise to close the card.
- If you have many credit cards and it is difficult to manage all the cards, then you can close some cards as per your need.
- Before closing any card, take advantage of all the reward points and cashback of that card.
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