Is It Wise to Close an Unused Old Credit Card?

Have an old credit card that’s just sitting around, unused? Have you found yourself asking “should I close down that old card”?

Emily from 20somethingfinance recently reached out with an equally pertinent query.

Should I close an old credit card that I no longer need and what will the impact be on my credit score?”

As my credit card collection grew into double figures, this is an intriguing question – one which I had also contemplated before. Unfortunately, like most things finance-related, the answer to it is far more complex.

My view is that more crucial than credit score impact is this:

How are annual card fees paid?
Consider whether or not the value you gain outweighs your annual fee: Many credit cards with annual fees offer some type of value even if you barely use it (check out some of my favorites on my “money saving products” page for examples). Hotel cards may grant certificates for free nights each year or points equivalent to free nights; if this appeals to you and outweighs its annual fee then keep that card!

If the annual fees you are paying exceed the value you receive in return, then close the card.

There are also credit cards with no annual fee and few perks that offer little use, like those offering 1% cash back (which seems appealing when first offered, before realizing all cards offer it) or those offering signup bonuses but little reason for ongoing usage after an introductory period has ended. From a credit score perspective, should these cards just sit idle?