When Should You Cancel Your Credit Cards?

We walk through the different scenarios to see if it makes sense to cancel a credit card.

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when to cancel a credit card decision tree

when to cancel a credit card decision tree

Annual fees

The first thing we have to consider is if the card has an annual fee. The worst case scenario is if you have an old credit card that has an annual fee and you don’t know what to do with it.

Can you product change the card?

My first suggestion is to product change the card, if available. An example of this is product changing a Chase Sapphire Preferred ($95 annual fee) to a Chase Freedom ($0 annual fee).

Another example of a card most people have after building credit is the Chase Slate card. Instead of canceling it after a few years, you can product change it to a Chase Freedom.

The second option is to see if you can break even on the annual fee. Some cards like the Amex Platinum have intangible benefits like concierge service. The Chase Sapphire Reserve has great travel insurance.

If you can’t break even on the annual fee or card benefits, it might make sense to cancel the card.

How to build your credit in the long run

Ideally, you want to keep all your credit cards because it will affect your credit score in the long-run.

Learn how closing credit cards affect your credit score in this post or watch the video below:

Keeping your credit cards organized

If keeping track of physical credit cards is an issue, we recommend getting a card holder to keep them organized.