Dear Credit Card Adviser,
I accidentally was approved for a credit card that I didn’t mean to apply for. (Silly, I know.) Now I’ve received an email that the credit card is on its way to my house! Is there any way to cancel this card? Would it negatively affect me if I canceled the card before I activated it?
No biggie, Sophia. You can cancel the card without any real repercussions. Credit card issuers aren’t like cellphone carriers — they’re not in the habit of charging early termination fees.
And your credit score should stay pretty much where it was at the time of the accidental application, given you haven’t had the card long enough for it to have made any significant impact. (Closing old credit cards, just to be clear, is an entirely different story.)
I say “pretty much,” regarding your credit score, because you likely took a small hit when you applied for the card. Credit card applications are considered a hard inquiry by major scoring models, such as FICO and VantageScore, so be sure to avoid similar mistakes in the future.
Want to know where your credit score sits today? Check it for free at myBankrate.
Now, there is a chance the new piece of plastic could help your score in the long term. The credit limit associated with the card could positively impact your credit utilization rate.
This rate is essentially how much debt you carry versus how much credit, collectively and on individual cards, has been extended to you. It’s a major component of credit scores — second only to payment history.
A good rule of thumb is to keep your utilization below 30 percent (the lower, the better). So, if there’s a chance the card can help you stay below that level, you might want to consider keeping it.
Of course, whether or not this is the right move for you depends on how disciplined you are. Ultimately, you don’t want to keep a card if it’s going to entice you to overspend or to miss payments. (Both of those habits would negatively hurt your credit.)
You also don’t want to keep a card that has less-than-stellar terms and conditions. For instance, if the card carries a high annual fee, it’s probably not worth the expense. Go ahead and cancel it or, perhaps, call up the issuer and see if you can switch to a no-fee product. You would be surprised how accommodating issuers can be in an attempt to keep creditworthy customers.
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