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A reader has credit cards with no balances. Should she close them or keep them?

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Question: I have had several credit card companies deny my request for decreasing my APR on purchases. If I choose to close these accounts, which have no balance on them at this time, how will it affect my FICO Score?

— Lynn in South Carolina

Howard Dvorkin CPA answers…

In the complex world of credit cards and credit scores, seldom can I answer so directly, “Don’t do that.” This is one of those times. Let me explain why.

Your credit score is based on five factors, and each one comprises a different amount of your overall score:

  • Payment history is 35 percent of your total score
  • Credit utilization is 30 percent
  • Length of credit history is 15 percent
  • New credit is 10 percent
  • Credit mix is 10 percent

I know what you’re thinking, Lynn: “What does this have to do with my question?”

Well, if you close credit cards that have zero balances, that affects your credit utilization. That’s a fancy way of saying, “compare the amount of debt you owe to the credit you have available.”

For instance, if you owe $10,000 on your credit cards but have a $100,000 credit limit, that’s better than owing $1,000 — but having only a $1,500 credit limit.

So if you close credit cards that have no balances, you’re surrendering part of your credit utilization ratio. Since that comprises nearly a third of your score, it’s not a small thing.

Then there’s length of credit history. This measures how long you’ve had your credit cards, on the theory that someone who’s been charging and paying responsibly over time is a good credit risk in the future.

If you’re closing credit card accounts you’ve had for years, you’re sacrificing part of your length of credit history, which represents 15 percent of your credit score.

I’ve simplified this explanation, Lynn, and I urge you to read’s report, Understanding Your FICO Credit Score.

A big “if”

Of course, my answer relies on a big assumption: You have zero balances on these cards because you pay your bills in full each month.

As you now know, payment history is the biggest factor in your credit score, at a whopping 35 percent. Paying on time is the most important thing you can do. If you have zero balances on a few cards but big balances on others, and if you’re massively in debt and barely able to make ends meet, you have bigger concerns than bolstering one facet of your credit score.

If this is your situation, the very first thing you should do is seek credit counseling to unravel your debts and figure out a way to financial independence. You should read, What Is Credit Counseling… And Why Do I Need It?

The question you didn’t ask

I’m guessing, Lynn, that you called your credit card company and asked for a lower interest rate because you read something on the topic, either from someone else or from me (Can I Really Request A Break From My Credit Card Company?).

You can be turned down for many reasons, but you can also seek other credit card offers. It may seem odd, but you can open a new card with a lower interest rate from another company, while keeping your existing cards and perhaps charging something every so often.

Once you have your new card(s) for 5-7 years, you can close the old ones with no ding on your FICO score.

To my dedicated readers, this will come as odd advice, since I’ve written in one of my books, “Learning to live without a credit card is an integral part of financial empowerment.” However, if you’re going to keep several cards open, I want you to do it the right way. As always, knowledge is power — but so is self-discipline.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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