# Credit Card: Better to Cancel or be Canceled? **URL:** \ **Category:** Factual Questions\ **Created:** [September 30, 2009, 12:29am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051 "2009-09-30T00:29:49Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![Purgatory\_Creek](https://avatars.discourse-cdn.com/v4/letter/p/74df32/32.png) [@Purgatory\_Creek](https://boards.straightdope.com/u/Purgatory_Creek)\ **Post date:** [September 30, 2009, 12:29am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/1 "2009-09-30T00:29:49Z")
We recently received a notice of some changes in terms that our credit card company (let’s call them Arms ‘N’ Legs Financial) has made to our account. Their letter states that if we don’t want to continue as cardholders under these new conditions, we need to notify them before their effective date, at which point our account will be closed by them. We aren’t a profitable customer for Arms ‘N’ Legs since we don’t carry a balance. Last year they got a little peeved and decreased our credit line because of “underuse,” which didn’t really bother us since they had increased it of their own volition in the first place. Anyway, this is the only credit card we have, and we do like to have one for online purchases and emergency video game purchases. My question for all of you financially savvy Dopers out there is this: Will it matter whether we just cancel the card versus having the credit card company cancel us? Does one look worse on a credit report than the other? As a bonus question, is it better if we attempt to get another card before canceling this one or being canceled by them? ---
**Author:** ![zoltar7](https://avatars.discourse-cdn.com/v4/letter/z/b38774/32.png) [@zoltar7](https://boards.straightdope.com/u/zoltar7)\ **Post date:** [September 30, 2009, 2:17am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/2 "2009-09-30T02:17:37Z")
Conventional wisdom is that it’s better for you to cancel the account than to have it closed by the grantor. It’s better to get another card (or several) before canceling the current one. ---
**Author:** ![Driver8](https://avatars.discourse-cdn.com/v4/letter/d/b5a626/32.png) [@Driver8](https://boards.straightdope.com/u/Driver8)\ **Post date:** [September 30, 2009, 2:51am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/3 "2009-09-30T02:51:18Z")
I don’t think it matters who closes it. The main reason closing a credit line can look bad is that it decreases your total available credit and therefore your used credit to total available credit ratio. If you go from 10% utility to 50% utility that could work against you. Which means that it doesn’t matter who closes the account. ---
**Author:** ![IAmNotSpartacus](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@IAmNotSpartacus](https://boards.straightdope.com/u/IAmNotSpartacus)\ **Post date:** [September 30, 2009, 2:53am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/4 "2009-09-30T02:53:26Z")
If they close it you [del]will[/del] can get a free credit report [if you ask]. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [September 30, 2009, 3:40am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/5 "2009-09-30T03:40:57Z")
Just in case anyone doesn’t know, the Free Credit Report Act guarantees you one free credit report per year from each of the three credit reporting agencies. You can request them here: > **[Annual Credit Report.com - Home Page](https://www.annualcreditreport.com/index.action)** > > ACR Home Page ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [September 30, 2009, 5:01am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/6 "2009-09-30T05:01:56Z")
I would close it my self. And make sure that it is recorded as closed at customers request. ---
**Author:** ![Purgatory\_Creek](https://avatars.discourse-cdn.com/v4/letter/p/74df32/32.png) [@Purgatory\_Creek](https://boards.straightdope.com/u/Purgatory_Creek)\ **Post date:** [September 30, 2009, 5:59am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/7 "2009-09-30T05:59:05Z")
Thanks, all. I kind of thought it would be best to close it ourselves and to make sure it shows up that way on the credit report. I think we’ll look for a better deal and then cancel the A ‘N’ L account after we’ve found another card. (Just one, **zoltar7**. We’ve been to the “several credit cards” place in our youths and learned just how much trouble that can get us into :eek:.) ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [September 30, 2009, 9:52am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/8 "2009-09-30T09:52:10Z")
> [@Purgatory\_Creek](#): > > Anyway, this is the only credit card we have, and we do like to have one for online purchases and emergency video game purchases. Consider getting a debit card, tied to your bank account. It looks/acts the same whenever it is used, and I doubt if it would ever be cancelled due to non-use. There are differences, however, and it would be good to educate yourself about them first. ---
**Author:** ![wmfellows](https://avatars.discourse-cdn.com/v4/letter/w/c2a13f/32.png) [@wmfellows](https://boards.straightdope.com/u/wmfellows)\ **Post date:** [September 30, 2009, 11:14am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/9 "2009-09-30T11:14:58Z")
> [@Driver8](#): > > I don’t think it matters who closes it. The main reason closing a credit line can look bad is that it decreases your total available credit and therefore your used credit to total available credit ratio. If you go from 10% _utility_ to 50% _utility_ that could work against you. Which means that it doesn’t matter who closes the account. Utility? I think you mean utilisation. Or usage. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [October 1, 2009, 6:16pm UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/10 "2009-10-01T18:16:18Z")
> [@Purgatory\_Creek](#): > > (Just one, **zoltar7**. We’ve been to the “several credit cards” place in our youths and learned just how much trouble that can get us into :eek:.) Bank of America raised the rate on our credit card from 14% to 23% for the sole reason that we didn’t have enough credit cards. Our credit scores are in the mid 700’s. ---
**Author:** ![Surly\_Chick](https://avatars.discourse-cdn.com/v4/letter/s/ec9cab/32.png) [@Surly\_Chick](https://boards.straightdope.com/u/Surly_Chick)\ **Post date:** [October 1, 2009, 6:30pm UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/11 "2009-10-01T18:30:03Z")
I’ve done both and neither affected my credit rating. In both instances, they were cancelled because I wasn’t using them. One was just cancelled by the card company 6 months ago and I’m buying a house right now and my loan company never even mentioned it. YMMV. ---
**Author:** ![MannyL](https://avatars.discourse-cdn.com/v4/letter/m/ba8739/32.png) [@MannyL](https://boards.straightdope.com/u/MannyL)\ **Post date:** [October 1, 2009, 8:02pm UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/12 "2009-10-01T20:02:00Z")
I would apply for new cards while you have the old card. You may find your score drop when the card you have closes. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 1, 2009, 8:10pm UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/13 "2009-10-01T20:10:07Z")
You didn’t say what the changes are. Because of the new law, most credit card companies are changing terms in order to get it in before the law goes into effect, so your new card might be no better. I don’t know the terms of this one, but if you do want to get another you might check out the no annual fee cashback cards. I have no idea of the interest rates, because they are guaranteed too high, which is why we pay on time and carry no balance. You can make money on cards if you play them right. ---
**Author:** ![Viscera](https://avatars.discourse-cdn.com/v4/letter/v/258eb7/32.png) [@Viscera](https://boards.straightdope.com/u/Viscera)\ **Post date:** [October 2, 2009, 5:08am UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/14 "2009-10-02T05:08:58Z")
> [@Fear\_Itself](#): > > Bank of America raised the rate on our credit card from 14% to 23% for the sole reason that we didn’t have enough credit cards. Our credit scores are in the mid 700’s. Someone’s gotta pay For Ken Lewis’s $53 million package… ---
**Author:** ![Philster](https://avatars.discourse-cdn.com/v4/letter/p/13edae/32.png) [@Philster](https://boards.straightdope.com/u/Philster)\ **Post date:** [October 2, 2009, 12:46pm UTC](https://boards.straightdope.com/t/credit-card-better-to-cancel-or-be-canceled/512051/15 "2009-10-02T12:46:03Z")
Keep the card open and don’t use it. Best for your credit score and although there might be anecdotal evidence from others that closing a card didn’t affect them, the reality in the scoring business is that is VERY likely to affect your score negatively (less credit avail increases ratios). The act in question that ensures you have access to one free credit report per year from the national credit reporting agencies (NCRAs) is the Fair and Accurate Credit Transactions Act (FACT Act). [AnnualCreditReport.com](http://AnnualCreditReport.com) is provided by the NCRAs in cooperation with the FTC, who oversees them.