Closing Your Credit Card Account Can Hurt Your Credit Score

I was just reading about how Closing Your Credit Card Account Can Hurt Your Credit Score on the About.com credit blog. I've heard this before--that closing your accounts can negatively affect your credit score due to change in length of credit history and ratio of used to unused credit. But it can also be good for your credit score to cancel cards that you no longer use. So the idea is it could be good or it could be bad.

My opinion is that you shouldn't beat yourself up over this issue. If you need a good credit score because you're getting ready to buy a house and can't pay for it with cash (who can), it might be worth hanging onto the account (not using it, though) for a little while. But if you don't have any immediate need for credit, forget about it and just cancel the stupid thing. You'll be better off financially if you just pay off all your credit cards and start saving and investing your money anyway. If you've got money in the bank, who cares what your credit score is? You don't need credit to buy stuff with cash. Our economy works largely on the whole credit scoring system, but in a lot of ways we're just playing along with a stupid game. If you've got no debt and money in the bank, you can get a loan for a home, and get a good interest rate. You might have to do it the "old fashioned" way--working with an actual human being, but you can get a loan. Plus, you'll sleep a lot easier at night not having to worry so much about your credit score. Just save your money and live your life.