Are you fed up with your credit card? Closing the card account may not be the best option especially if the card belongs to the 5 categories outlined below. You should be just as selective about the credit cards you close as the ones you open. Before you make the decision to close your account, make sure it’s not going to affect your credit score in a negative way. Here are 5 credit cards you should never close and why it’s better to leave them open.

5 Credit Cards You Should Never Close

1. A credit card that still has a balance | 5 Credit Cards You Should Never Close

One of the 5 credit cards you should never close is any credit card that still has a balance. When you close such a card, your total available credit and credit limit are reported as $0. Since you still have a balance on that credit card with no credit limit, it looks like you’ve maxed out. This can have a very negative impact on your credit score since your level of credit card debt, including your credit usage to available credit ratio, is 30% of your credit score.

2. Your only credit card with available credit | 5 Credit Cards You Should Never Close

Your only credit card with available credit is likely helping your credit score by lowering your overall credit utilization. Closing this card will leave you with more credit cards that have balances and higher credit utilization. Just like closing a credit card with a balance, closing one without a balance can also affect your credit score, because you’ve used up all the credit that’s available to you.

3. Don’t close your only credit card

It’s good to have at least one credit card left, since part of your credit score (10%) is based on the different types of credit you have. Leave your only credit card open to show that you have experience managing various types of credit accounts. You should definitely leave the card open if it’s the only active credit account you have and you’re working to rebuild your credit history.

4. Don’t close your oldest credit card account

Experience matters in this credit card business. Lenders tend to view borrowers with short credit histories as riskier than borrowers with longer histories. Closing out old credit cards shortens your average credit age, which is 15% of your credit score. The impact may not be immediate but once the credit card falls off your credit report, after some years, you might see an unexpected credit score drop.

5. The card with the best terms

If you have a credit card with the best terms – a low interest rate, no annual fee, and other perks like travel insurance or great rewards, keep it. A credit card that charges you less for making purchases is far better than one that charges you more. Compare your current credit cards to a few others on the market right now. If you have a credit card with better terms, it’s better to leave it open.

When to Close a Credit Card

There is no harm in closing a newer credit card that you no longer use as long as the card doesn’t have a balance and you have other credit cards. You can also close a credit card that suddenly raises your interest rate or introduces an annual fee once you pay off any outstanding balance. Your credit card issuer will probably close the credit card for you if you decide to reject these new credit card terms. Finally, in identity theft and fraud situations, your creditors will advise you to close the credit card to keep the thief from making fraudulent charges.

Follow The Right Steps

Always close a credit card by sending a written notice to the card issuer. You can call first to cancel your account, but always follow up with a letter confirming your desire to have the credit card closed. You can make sure the credit card is reported as “Closed” on your credit report. It won’t necessarily hurt your credit score if the credit card continues to be reported “Open,” but double checking will ensure your card is indeed closed.