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Q.

The Nest Q&A

We have a credit card that we never use, and it has an annual fee. Will it hurt our credit score if we close it?

A.

Ah, the mysteries of credit scores. To determine whether closing a credit card will negatively affect your score, you need to consider two things: the amount of your credit line and how often you use the card, and your immediate goals. First: Canceling a card with a low limit that you never use is way less damaging than getting rid of a card with a high limit that you swipe regularly. Second: If you're planning to apply for a mortgage or car loan in the near future, it won't look good on your application if you're cutting off cards. Bottom line? Close the card as long as you have other lines of credit, a healthy credit score and aren't applying for loans in the next couple of months or so.