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When dealing with credit card debt, some may choose to close accounts, though consumer credit counseling is also an option
12/11/2009
Many consumers are dealing with credit card debt, and some may wonder how their strategies may affect their financial situations.
For example, a recent story from the CBS Early Show featured a question from a viewer who was considering closing a credit card that was issued by a department store. The viewer was worried that it could have an effect on their credit score.
Ray Martin, who is a contributor to the show, said that chances are the effect of closing a department store credit card will probably be small because such accounts come with very low credit limits.
"At best it helps your score," Martin said. "At worst, it most likely will not impact your score at all."
One thing Martin did not note is the fact that closing any credit card account does reduce the overall amount of available credit a consumer has. The amount of credit a person has does factor into a credit score, so people should keep that in mind when they consider closing any line of credit.
Along with the amount of credit a person has, another thing that factors into a credit score is whether they pay their bills on time. Those who are having trouble paying what they owe may consider visiting a consumer credit counseling agency, which can help them deal with paying loans.
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