Many consumers have a misguided notion that once they close their credit cards their debts go away. There is no truth found in this concept but on the other hand a delinquent credit card debt may hurt your credit score. There are some credit cards that you must not close.

• Do not close a credit card that still has an outstanding balance. When you initiate this move your total available credit is reduce to zero. Keep this in mind the amount of debt that you have is 30% of your credit score so a maxed out credit card has a negative effect on your credit score.
• Closing out your present credit card will lower your total available credit which in turn will increase your credit utilization. Credit utilization is the ratio of your credit card balance to your credit limit. To find out how much of credit utilization you have simply divide your credit card balance by your credit limit then multiply this by 100. Having low credit utilization will be good for you because this shows that you are only using a small amount from the credit that was loaned to you.

The FICO (Fair Isaac Corp.) score model looks at your credit utilization in two parts. It scores your credit utilization for each credit card separately. Then it calculates your credit card balances comparing them to your total credit limit. To keep low credit utilization you need to decrease your credit card balance or increase your credit limits so that your credit score will increase.

• Keeping a set of different credit cards will add to your credit score points since creditors will think that you know how to handle the use of your credit cards.
• Keep your oldest credit card account. Lenders often see borrowers with short credit histories as a high risk borrower than those with longer credit histories.
• Keep your credit card who offers the best terms. If your credit card offers a low interest rate with no annual fee and have additional benefits then keep it. A credit card that charges you for less when making purchases is way much better than the credit cards that charge higher fees.

It is a wise move to decide closing a newer credit card when you no longer need this as long as this card does not have an outstanding balance. The right way to close your credit card is by sending a written request to your credit card issuer. For your personal records and for future reference purpose the credit card issuer should answer back with a written confirmation that your credit card account is closed in good standing. If you are a victim of identity theft and fraud your creditors will recommend that you close your credit card to avoid the damage that the credit card may give you. Choose wisely on what credit cards you need to close as well as which one to keep. Make sure that your credit score will not be affected in any way.