How Does Closing My Chase Card Affect My Credit Score?
If you are thinking about canceling your Chase credit card, you should first think about how doing so could negatively impact your credit score. Canceling a credit card can raise your credit utilization ration and lower the average age of your credit accounts. Both of these things can lower your credit score.
Everyone knows that paying your bills on time is an important part of maintaining a good credit score. However, there is more to your credit score than timely repayments. If you are thinking of closing out your Chase credit card account because the rewards aren't exactly what you are looking for, or to avoid the annual fee, you should stop to consider how doing so could lower your credit score.
Your Credit Utilization Ratio
Another important part of your credit score calculation is your credit utilization ratio. This ratio is simply the total amount of debt you carry on your credit cards divided by the total credit limit you have on your cards. So when you cancel a credit card, you have a lower total credit limit, so your credit utilization ratio goes up. This is not a good thing.
Credit reporting agencies pay attention to your credit utilization ratio because they believe it indicates how well you are managing your finances. A high credit utilization ratio indicates that you are using a large portion of your available credit. This in turn suggests that you are having a hard time paying off your credit card debt, and that suggests that you are having financial troubles and may not be able to handle much more debt.
Say for example that you have three credit cards with a $1,000 credit limit on each and carry a balance of $1,000 spread over the three of them. This gives you a credit utilization ritual of $1,000/$3,000, or 0.333. If you have only two cards to spread that debt over, your credit utilization limit is $1,000/$2,000, or 0.5 In other words, you will have moved from using only a third of your available credit to using half of it. That kind of change could significantly lower your credit score.
Your Credit Account Age
Credit reporting agencies also pay attention to the average age of your credit accounts. Having had a credit account for a long time suggests that you manage your money well. When you cancel a card you have had for a long time, your average credit account age can decrease, if your other credit card accounts are newer than your Chase account. However, this is not such a concern if your Chase account is relatively new.
Contacting Chase
If you have any questions for Chase about closing your Chase credit card account, you can contact a customer service representative by phone or help forum.
Further questions?
Solutions to similar problems
Why does GetHuman Write How-to Guides for Chase Problems?
GetHuman has been working for over 10 years on sourcing information about big organizations like Chase in order to help customers resolve customer service issues faster. We started with contact information and fastest ways to reach a human at big companies. Particularly ones with slow or complicated IVR or phone menu systems. Or companies that have self-serve help forums instead of a customer service department. From there, we realized that consumers still needed more detailed help solving the most common problems, so we expanded to this set of guides, which grows every day. And if you spot any issues with our How Does Closing My Chase Card Affect My Credit Score? guide, please let us know by sending us feedback. We want to be as helpful as possible. If you appreciated this guide, please share it with your favorite people. Our free information and tools is powered by you, the customer. The more people that use it, the better it gets.