How Can You Back Out of Credit Card Deal Already Made?

In the life of every cardholder there comes a time when they want to close their credit card account for any reason. It may be the unmanageable debt, interest rate hike and other unfair credit card practices like universal default.

Whatever the reason, closing your credit card, you inevitable damage your credit score and spoil your chances to make a really profitable credit card deal hereafter. However, the extent of the damage may be different and it depends on what credit card you close.

Let's sort it out.

Let's assume you received a new credit card offer in the mail. Credit card solicitations in the mail look so alluring sometimes that you hardly ever bother examining the fine print which very often hides unpleasant credit card pitfalls.

Now, let's assume that you discovered some very troublesome feature, exorbitant interest rates, for example, shortly after you activated the card. Will it affect your credit scores if you cancel the card without having made a single purchase on it?

Financial and credit experts maintain that whatever you do with your credit account, it will inevitable be reflected on your credit scores.

In case you cancel an old credit card, you actually erase part of the good or bad, no matter, credit history. In other words you reduce your credit utilization, or credit card debt ratio. And this is no good to your credit standing.

Now, if you have just signed up for a credit card, canceling it will not hurt your scores that much. Your credit score must have already been affected during the inquiry which card issuing companies practice to evaluate the risk of the potential cardholder. So, the account closure will probable give only a small or even no hit at all to your FICO scores.

There is a caution note, however. You can safely close this new credit card only if you do not plan to make a major purchase in the nearest future.

Let's consider still another situation. There are consumers who ask about a potential effect on their credit scores if they "cancel" a credit card that they have never activated or used. In their case they can not really "cancel" it without activation. They just do not use it at all. However, we advise them to mail to the issuer still to inform them about their opting out.

A very interesting piece of advice comes from one of the financial experts. If you do not want to risk closing it, leave it, activate it and keep the card for emergencies. If you do not charge, there are no interest rates accumulated, so you are on the safe side. However, you do have to check out if the deal bears an annual fee and if it does, you hade better close the account.

If there is no annual charge, why not keep the card? It is a great chance to build a good credit history if yours is still small or weak. A credit company will always appreciate a loyal customer, so you can become one, only if you are cautions about the hidden fees and tricky rates.