Question: If I get a rewards credit card that waives the annual fee for the first year and cancel the card before it charges the fee, will that affect my credit score? -J.B., Harrisburg, Pa.
Answer: You can generally close a credit card whenever you want, but doing so could lower your credit score, says John Ulzheimer, an expert on consumer credit. The new card's credit limit is added to your "credit utilization ratio," which measures the portion of your available credit that you've used. If your balance across all cards remains the same but you close one card, your utilization ratio will rise, which could hurt your score. You can minimize the impact of canceling a credit card if you pay down your balances and keep your charges low on all of your cards.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
The Hidden Cost That's Ruining Vacation Home DreamsAre rising HOA fees derailing your second home dreams? Annual dues, insurance premiums, and taxes are rising, boosting total ownership costs. Here's what you can do.
-
If You're Ignoring Private Markets, You're Missing Most of the ActionPrivate markets are becoming increasingly essential for all investors, not just institutions, and they are now more easily accessible thanks to innovative investment structures.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
