Is it always bad to close credit cards?

I have heard it is bad to close and get rid of credit cards BUT there are two cards that I am interested in due to their rewards. I do not want to keep too many cards open so I would close my current cards out. Is that ALWAYS bad for your credit score? Wouldn't it be worse to have too many open cards?

Re: Is it always bad to close credit cards?

I was actually wondering this myself! My two rewards CC's have a high interest rate and we were looking to switch them out.

Re: Is it always bad to close credit cards?

i really don't think so - from my experience. dh had really bad credit. we paid off and closed a bunch of his accounts and his credit improved drastically. but that may have been because of how bad his credit was. my thinking was that it was better for the credit report to say "account closed by consumer" than "account closed by creditor."

Re: Is it always bad to close credit cards?

I believe they look at how much you owe vs. how much credit you have available to you.

Re: Is it always bad to close credit cards?

Not always.
Let's say you have 2 cards and have had one for 10 years and the other for a couple of years.

If you close the card that you've had for a long time, the length of your credit history will be negatively effected and your score will very likely go down.

If you have 2 cards w/ no outstanding balances and one has a higher limit than the other, closing the high limit card will have a negative effect.

Having many cards w/ no balance can be a good thing.

Hope this helps.

Re: Is it always bad to close credit cards?

Re: Is it always bad to close credit cards?

My understanding is this:

Never close the accounts you've had the longest - since length of credit history affects your score (the longer, the better)

Your debt to limit ratio affects your score - the lower the debt amount is compared to your total overall limit, the better.

So if you close two cards whose limits are $1000 each, without decreasing the amount you have in debt, your credit score would go down.

If you close those same two cards, and paid off $$$ also, then it could stay the same.

KWIM?

As said above, having a lot of cards with no balance isn't necessarily bad since you'd have a lower debt to limit ratio.

The negative is that with the way credit companies are running now, they may close unused accounts or drastically lower the limits.

Re: Is it always bad to close credit cards?

No not always, just don't close too many at once, the more credit available you have, the better. Since you are opening to replace what you have already that should be fine...