Closing a Capital One credit card can be a huge step in the right direction. And that direction may lead you to financial freedom. Living without the ability to swipe a credit card may give some people anxiety. But constantly swiping a credit card can lead to massive credit card debt. And that credit card debt can lead to immense stress and depression.
What does it mean to close a credit card?
Closing a credit card means permanently terminating your account with the credit card issuer. Once you close your Capital One account, you can no longer use the card. In other words, you don’t have the ability to rack up more debt with a closed credit card. However, closing a Capital One account doesn’t grant you immunity from high interest charges, making your minimum payments or avoiding late fees.
Why would you close a Capital One credit card?
The best reason to close your account is because you lack self-discipline. You can’t trust yourself. A credit card in your wallet is like a weapon of mass destruction in your mind. Knowing that you have an open line of credit in your back pocket will likely lead to you swiping it. Once you close your account, there are no bullets left in your gun. All transactions will be denied. And your ability to overspend vanishes – at least with that card.
Closing an account can be more of a personal milestone. It’s a great way to remind yourself that you are committed to changing your behavior. And a reminder that you are not a debt person anymore. Keep in mind that there are good reasons for closing a card and bad ones also.
Good reasons for closing a Capital One card
1. Stop the Overspending
2. Joined a Debt Management Program
3. Stop Annual Fees
4. Protect Against Identity Theft
Bad reasons for closing a Capital One credit card
1. Interest Rate Increased
2. Poor Customer Service
3. Refused to Lower My Monthly Payment
4. Paid Off Entire Balance
How will closing a Capital One credit card affect my credit?
Debtors shall not covet thy credit score. A good credit score means you have a good chance of obtaining a loan. In other words, a good credit score leads to debt. Those who focus too much on credit scores typically struggle to become debt free.
Closing an account could negatively impact your score. Shutting down a line of credit will increase your credit utilization ratio assuming the account had available credit. However, closing an account that is already at the credit limit or over the limit may not have any impact on your score.
The length of credit history might be damaged as well. The older the account is, the greater the effect on your score. However, closed accounts in good standing can remain on your credit report for up to 10 years, continuing to contribute to your overall credit history.
Stop swiping your credit cards and budget for a strong future
Closing a card will not help you become debt free faster. However, refraining from using credit cards in the future can definitely help. Put together a solid budget instead. Have a plan for how you spend every dollar. Reduce expenses. Find ways to increase your income. Eliminate the insanity and become debt free. Seek Credit Counseling for more advice. Furthermore, discover the benefits of debt management.