Youre thinking of closing a credit card, but youre not sure if its a good idea. Heres a quick guide for deciding when its time to get rid of that little plastic rectangle and when you might want to keep it around. If the rewards outweigh the annual fee or interest payments Consider closing the card. Rewards cards are great, if used wisely. If youre earning cash back or rewards that are instantly canceled out by how much youre paying in fees or toward interest payments, then you may want to close the card. If closing the card will increase your credit card utilization rate Think about keeping the card open, at least until you pay down your credit card balances.
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