Harry asks: “I have had a Santander 123 credit card for about a year. How negatively it will affect my credit score by cancelling?”
Q&A 88 – Cancelling A Credit Card – Shownotes
I have had a Santander 123 credit card for about a year but with the rate increases and a decline in my spending due to a career change I will now be losing money by having it.
So I’m wondering how negatively it will affect my credit score by cancelling, enough to take the loss for a couple of years or not so much that I’m better to ditch the card now?
Minimal Impact On Your Credit Score
Thanks for your question Harry. Nice easy one today. The answer is “not really”.
Cancelling the card will reduce the amount of “credit” you are using, but everything you’ve done on the card in the past year still remains on your “credit profile” and hence actually closing the account probably won’t have any impact on your credit rating.
Even if it does, the impact will be so minute that it won’t affect any future lending decisions. Therefore, if you think that keeping the credit card open will cost you more in fees compared to what you’ll earn in cashback, then close it down.
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