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Dec 14 2009 12:00AM

Question


Is it best to close out paid off, unused credit cards or leave them open? My credit score is in excellent range.

Answer


"It is possible that closing these accounts could negatively impact your credit score, especially if some of these accounts have long, consistent payment histories," said FPA member A. Christopher Engle, CFP®, ChFC®, of Argus Financial Consultants. "It is not likely that the impact would be significant since you have indicated that you have excellent credit history. A bigger concern would be the potential for fraud with these accounts. Since you would not get statements on these accounts, you may not notice fraudulent charges on a timely basis. The more accounts that you have open, the more there is potential for identity theft. Consider choosing one card that fits best with your financial situation and cancelling any unused accounts."

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