Credit – Calculate which credit card to cancel

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Belinda has five credit cards. Two are idle, so she decides to cancel one. But before she does, she checks whether cutting a card might cut her credit score as well.

Belinda’s current total balance is $1,500, and her total credit limit is $12,000. She is currently using a 12.5 percent (1500/12000) of her available credit, which is well below the 12-percent recommended limit. But that number could change drastically if she cancels the wrong card.

Belinda’s appliance store credit card has a zero balance and a $5,000 limit. If she cancels that card, her limit totals will shrink from $12,000 to $7,000. But a $1,500 balance divided by $7,000 would be around 21 percent. Because that’s more than the credit scorers’ 20-percent safety limit, Belinda’s credit score could drop.

On the other hand, Belinda’s department store card has a zero balance and $1,000 limit. If she cancels that card, her total limit will slide from $12,000 to $11,000. Credit scores will divide $1,500 by the 20 percent that triggers a credit score drop. Belinda will play it smart and cancel this card instead.



All the best,



Timben