Miles and Points Travel

You have options

There are several reasons why it is not advisable to cancel a credit card within the first year:

1. Impact on Credit Score: Closing a credit card account can impact your credit score. It can affect the length of your credit history and your credit utilization ratio, both of which are factors that influence your credit score. If the card you’re canceling is one of your oldest accounts, it could have a more significant impact on your credit score.
2. Credit Utilization Ratio: Closing a credit card reduces your total available credit, which can increase your credit utilization ratio if you carry balances on other cards. A higher credit utilization ratio can negatively impact your credit score.
3. Points or Rewards: If the card offers rewards or points, canceling it could mean losing those benefits. It’s essential to consider whether the rewards accrued are worth more than any potential drawbacks of keeping the card open.

However, if the card has high fees, you’re unable to manage it responsibly, or it doesn’t suit your financial needs, look at a PRODUCT CHANGE. Call the card issuer and see what your options are to downgrade the card to one with no annual fee. You will sacrifice earning a signup bonus with that card, but you will at least move on from the high annual fee you are trying to drop.

It’s essential to weigh the pros and cons and consider your long-term financial goals before making a decision.