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While the focus of The Financial Woman is more about investment education than debt management having the best possible credit rating is an important aspect wealth management. With credit card companies aggressively raising rates many consumers are wisely choosing to discontinue use of all cards that charge interest. Unfortunately as great as it feels to destroy that plastic and close the account doing so can actually harm your credit rating.
When you close a credit card account your debt-to-available credit ratio drops which is where the trouble can arise with regard to your rating. It may be worth getting another card with the same credit limit to maintain the same ratio. When you do close an account make sure to write a letter in addition to a phone call. Ask that your credit report state that the account was closed “at the customer’s request”. Most important of all only use credit for appreciable assets and know yourself with regard to the discipline required to use credit responsibly.