What is the best way to close a credit card without hurting my credit score?

Question

I'm looking to close a credit card which I got for it's travel bonuses but the yearly fee is too high. My other credit card is much older so I will keep that and close the newer one. Is there anything I can do at the time of closing the credit to limit the damage to my credit score besides paying off the whole balance before?

Answer 1

It's always a good idea to close unused accounts that have annual fees to save money. Since you're not closing your oldest card the hit to your credit score should be minimal - if at all. As long as you continue to practice responsible credit management, your score should rebound quickly.

However, if you are planning on financing a major purchase such a house or car you may want to wait to close the card until after the transaction. That way your credit score won't get dinged and you would qualify for the best rates possible for your situation.