This simple step can save your credit rating

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Dear Dolans,

I've followed your advice and actually paid off the balance on one of my credit cards. I'm very excited! Should I cancel that account now?

Maya

Great question, Maya. This is a situation we hear about a lot.

First, let us congratulate you. You've been smart with your money, worked hard and accomplished something significant by paying off one of your credit cards. Well done!

We understand your desire to cancel that account, but that may not be the right thing to do.

There are two very important questions to consider here:

  • Is it in your best interest to cancel the card? (It's not always.)

  • If you do cancel the account, are you doing it the right way?