Close a Credit-Card Account to Avoid Fees?

You might have to pay if you don't use your card, but you could hurt your credit score if you close the account.

Editor's note: This story has been updated in 2012.

Thank you for your More Credit-Card Fees Coming article. I have several cards that I don’t use, and I worry that I could get hit with inactivity fees and other new fees if the card companies look for ways to make money in reaction to the new credit-card law. It seems as though it would be better to close the credit-card accounts rather than have to pay the fees, but I’ve heard that doing so can hurt your credit score. Sounds like a Catch-22. What should I do?

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.