By Kyle Olson

When deciding to close a credit card, there are many options to consider. Some experts say that closing a credit card, in general, is a bad decision as it eliminates the amount of available credit on your credit score, among other harmful things.

Some people decide that the temptation of a credit card is too much to bear. Others believe the high interest rates aren’t worth the small perks when you purchase gas or groceries. Some even go into deep personal debt because of their credit cards, sometimes having to end up filing for bankruptcy.

Regardless of the reason of why you decide to close a credit card, experts say there are good ways to go about the process of closing it, and bad ways.

The Bad

Closing a long-standing account

When you close a credit card that has a long history of timely payments you may end up hurting your credit score. Lenders view people with shorter credit history as a risk factor.

Assuming a dormant account will automatically close

Lenders can keep your account and credit line open indefinitely, regardless of the amount of time it has been open. If you’re confused as to which accounts are active and which are closed, experts suggest contacting the issuer of the card or ordering your credit report to find out.

Consolidating cards

Closing other cards to put the balances all on only one other card can be detrimental to your credit score. If the balance exceeds 50% of the credit line, your score will take a hit.

Canceling to make a big purchase

If you’re in the market for a house, car, or boat you may want to think twice about closing any credit lines. Sometimes it’s only temporary but it could be a crucial drop in your score if you’re aiming for a low interest rate or mortgage rate.

Close too many

Experts say it’s better to close accounts one by one if you do decide to close your credit card accounts.

The Good

Okay, we got through the nightmare mistakes that some people make. If you have decided to close some credit card accounts, there are ways that experts say you can go about it in a successful manner.

Closing cards you don’t use and that have high interest rates

If you feel you are likely to splurge with a credit card, then closing it might be a great idea. Also, experts say that the less cards that are open in your name, the less chance of identity theft happening.

Closing an account that still has a balance

If you’re looking to just pay the card off but can’t do so in a quick manner, asking the issuer to close the card while you pay down the balance might be the right option for you.

Have one primary card

Select a card that has great benefits and low interest. Paying it off each month can greatly improve your credit score.

Keep an account open

Creditors look for people who have accounts open and who are responsible with their money. It’s important to keep at least one card open to show that you can handle to challenge.

Destroy canceled cards

Running your card through a paper shredder is a great idea, according to experts, if the machine is capable of the task. Make sure you check before jamming your cards into your office’s paper shredder.