Cancelling Credit Card vs. Cancellation due to inactivity? Which is better?

Question

I have heard many of times that cancelling a credit card will also hurt your FICO score, so to let my credit card company close it due to my inactivity. Is this true? Will it really make a difference? Obviously I want to preserve my FICO the best possible.

Answer 1

In terms of your score, neither will help you and one won't hurt your score worse than the other. If you want to preserve your score, use your card often enough that it isn't closed due to inactivity. Once per month should be fine (just pay it off in full and on time).

Answer 2

Yes. You should not cancel your credit card, unless it costs you a butt load of money just to keep it. If they cance it, it hurts also.

What I would do, is use it once a year. Charge something little on it, then pay it off. If you only have this card, this is a good idea.

What usually happens is, all inactive accounts will eventually disappear off your credit reports. This, in turn, shortens the length of your history, which is not good when you go to apply for something major.

If you already have more than one that you use, it may be a good idea to close it out, because it will not affect your score if you have other cards.

Answer 3

Hands down, you closing a credit card is far better for your score than them doing it. Just use it once a month and pay it off, or if the rates are to high get a new card. Having Potential credit increases your credit scoreie 2000 credit card with a balance of 250..

Answer 4

This article from ApexCreditCards.com explains it pretty well:
http://www.apexcreditcards.com/article-how-canceling-a-credit-card-can-hurt-your-credit-score-6.html

Answer 5

Instead of canceling your cc, or having it canceled due to no activity why not buy your gas on it once a month, and then go home and write them a check to cover it.

instead of hurting yourself, you'd be buying what you needed anyway, and paying before the bill comes, therefore doing yourself goodd!