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Don't Close Your Old Credit Card. Here's Why!


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There is a time in everyone’s lives when they jump at the prospect of having a Credit Card. However, due to no credit history, and little or no room for negotiation, they end up with a card that not only asks for high-interest rates but also offers no significant benefits! And then, as one grows financially, and gains more stability, they finally have access to some of the best Credit Cards that assure great benefits at lower rates of interest!

Sounds familiar? This may very well be your story!

Now that you have an excellent Credit Card that works in your favour you must be thinking about getting rid of your old card. But wait. Don’t do that just yet. If you have a card that’s lying around without use, let us tell you what exactly to do with it, and why!

1. Keep Your Card Open

If you chose to close yourCreditCard, it might hurt your credit score. On the other hand, if you keep it open for as long as you possibly can, it will help you display a better financial discipline.

For starters, your old card will entitle you to longer credit history. And the more is the length of your history, the better it is considered. This is a valuable aspect and will help you in getting quick approvals, in case you ever need to take a loan. 

Besides, keeping your old card open will help you maintain a better Credit Utilisation Ratio (CUR), which refers to the percentage of your limit that you spend on an average. Ideally, your CUR must be 30% or less. If you have a credit limit of Rs. 10,000 on your old card, and that Rs. 40,000 on your new card, you can conveniently spend, 30% of Rs. 50,000 i.e. Rs. 15,000, without inflicting any harm on your CUR. On the other hand, if you only have a single Credit Card, with a limit of Rs. 40,000 on spending, you will be able to spend only Rs. 12,000.

Given that the length of your credit history accounts for 15% and your CUR accounts for 30% of your FICO credit score, it is in your best interest to keep your card open. 

2. Pay the Interest

In case, there is outstanding balance on your old card, make sure to pay the same, and bring it down to zero. This will help you in avoiding accruing interests. Moreover, you will not need to keep track of the pending payments.

3. Request for Fee Waivers

If your old card is accompanied by an annual fee, you may request the Credit Card provider to waive the fee. If that doesn’t seem feasible, you may ask them to downgrade the card to a free alternative, while still keeping the same credit limit. This will help you enjoy the benefits of retaining the card, minus the unwanted expenses.

4. Keep the Card Securely

If you are not using your old Credit Card, it is of no use carrying it around in your wallet. Merely ensure that you can access it in case of an emergency, and keep it in a place that is out of reach of thieves and pickpockets.

At this point, you should even take down the details of the card from various shopping portals on the interest, lest you may risk the information being stolen and misused.  Even after you do so, make sure to check the statements on a monthly basis, to ensure that there is no discrepancy.

While there are some enticing reasons to keep your card running, sometimes, closing the card may become inevitable. For instance, if you are in a weak financial position, and need to do away with all your debt or merely wish to incorporate a more significant fiscal discipline in your life, it is best that you take that much-needed break from CreditCards. While this may harm your credit history a little, precaution is always better than cure, especially when it comes to your financial health.

Now that you are aware of the astounding benefits that Credit Cards can bring along, don’t wait anymore before you start your hunt for The Best Credit Card Offers. After all, you deserve to enjoy all the advantages; your money can possibly offer!


To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.

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