The average Canadian consumer had an average credit card balance of $2,121, according to a recent Equifax Canada survey.
Many Canadians have one or two old credit cards that they no longer use. Before you jump to close your old, unused credit card, here are some of the pros and cons of closing a credit card account, so you can make the most informed decision.
Credit cards can be successfully leveraged to improve your credit rating, convincing lenders that you鈥檙e a trustworthy borrower who pays their debts on time. Conversely, carrying over large balances, missing payments, or, according to Equifax.
What about old credit cards, though?
According to Equifax, that play into your score are:
Closing a credit card will immediately decrease the amount of total available credit that you have access to. For example, if you have $10,000 worth of available credit, and you close an old credit card with a $2,500 limit, then your updated amount of total available credit will be just $7,500.
Your credit utilization rate is directly impacted by the total amount of available credit that you have access to. Generally speaking, a high credit card utilization rate (using more than 30% of your total available credit) can hurt your credit score.
Let鈥檚 just say that you have $10,000 worth of available credit and $1,000 worth of credit card debt. This would put your credit utilization rate at 10%, which isn鈥檛 bad.
However, if you closed an unused $3,000 credit card, your total available credit would be reduced to $7,000. Assuming that you still have $1,000 of credit card debt, then your new credit utilization rate would be over 14%, which is considerably higher.
Looking at Equifax Canada鈥檚 website, you鈥檒l see that the age of your oldest credit card accounts for 15% of your total score. If the card you鈥檙e thinking of closing happens to be your oldest credit card, then closing it could dramatically reduce the age of your oldest credit account.
This, in turn, could have a negative effect on your score, as your oldest credit card account age would be updated to reflect the next-oldest card that you own.
However, if the card you鈥檙e thinking of cancelling is not your oldest card, then this credit rating factor wouldn鈥檛 be affected by closing the account.
Benefits of keeping your old credit card account open
To summarize, here are some of the key reasons and benefits of keeping your old credit card account open (even if you don鈥檛 use it anymore):
By keeping your old unused card open, your credit utilization rate will be lower. Since your utilization rate is determined, in part, by the total amount of available credit you have. Keeping a card open shows that you鈥檙e using less of your total available credit than if you were to eliminate the credit line.
If the credit card happens to be your oldest credit card (which is often the case with an old unused card), then keeping it open will positively affect your credit rating. Closing it could decrease your credit age.
Last but not least, keeping your old credit card open can be useful in emergencies. You never know when an emergency repair or expense may come up out of the blue. Using your old credit card to cover the expense is a lot easier than going through a lender and applying for a third-party loan.
Although there are plenty of benefits to keeping your old unused credit card open, here are some reasons why you may still want to close the account.
Many cards come with an annual fee required to keep the account open. If this fee becomes troublesome, then closing the account will eliminate the fee.
Recent Equifax polls . If you have a spending problem that can鈥檛 be managed by locking the card in a safe, then closing the credit card could help you reign in your bad spending habits.
Overall, keeping your old unused credit card open has far more benefits than cancelling the account. Closing the account could increase your credit utilization rate and decrease your credit age - both of which can negatively impact your credit.
If you鈥檙e scared of losing (or using) the old card, I recommend locking it in a safe box or keeping it somewhere safe and out of sight. If you need it for emergencies, it will be there.
In part two of a four-part investigation into the seedy underbelly of the lucrative clothing donation bin industry, CTV W5 uses trackers tp reveal a for-profit operation masquerading as a charity.
The XEC strain, a hybrid of Omicron subvariants KS.1.1 and KP.3.3, was first detected in Canada in mid-August and the number of COVID-19 cases with the XEC variant has rapidly increased.
Police have confirmed the body of an employee who died at a Walmart in Halifax over the weekend was found in a walk-in oven.
A father and his two children who suffered severe burns in a Springfield, Ont. house fire have undergone surgery.
Ellen Francis says she and her family were having a great time at one of Cuba's famously stunning beaches and exploring the popular tourist town of Varadero when the situation turned into something like a scary movie.
Canada is getting served a smorgasbord of weather this week. The West saw its first sign of winter, while the eastern half of Canada experienced summer-like temperatures on Tuesday.
As King Charles III prepares to address Commonwealth countries, Royal commentator Afua Hagan explores whether he will broach the issue of slavery that has long been a source of tension between former colonial powers and their former colonies.
On the tenth anniversary of the shooting on Parliament Hill, a man was arrested and charged with trespassing as he attempted to push past security guards into the House of Commons.
The U.S. Centers for Disease Control and Prevention issued a food safety alert Tuesday regarding an E. coli outbreak that it says is linked with McDonald鈥檚 Quarter Pounders.
British Columbia's highest court has weighed in on a dispute over an inflatable hot tub a couple set up on their condo's patio 鈥 potentially bringing a close to the years-long conflict.
A father and his two children who suffered severe burns in a Springfield, Ont. house fire have undergone surgery.
Canada is getting served a smorgasbord of weather this week. The West saw its first sign of winter, while the eastern half of Canada experienced summer-like temperatures on Tuesday.
Mounties in British Columbia say a second person has been found dead after two vehicles ended up in a river on Vancouver Island when a road washed out amid torrential rains over the weekend.
None of the more than 1,600 Canadians currently registered in Cuba have requested consular assistance in returning to Canada, Global Affairs Canada confirmed to CTVNews.ca.
Quebec Premier Francois Legault promised on Tuesday to toughen secularism measures in schools, saying he was 'shocked' by revelations about a Montreal public school where a group of teachers had tried to introduce what the premier described as 'Islamist' beliefs.
John Kelly, the retired Marine general who was Donald Trump's White House chief of staff, told The New York Times that the former president fits 'into the general definition of fascist鈥 and 'certainly prefers the dictator approach to government.'
At least 11 people were killed Tuesday after a fuel truck exploded next to a highway in Uganda, police said. Two children were among the dead.
Large chunks of Cuba continue to be without power as the death toll climbs to seven following Tropical Storm Oscar hitting the country's east coast, delaying a resolution to their nationwide blackout.
Democratic nominee Kamala Harris on Tuesday said she would work to bring more funds to community banks to help Latino men secure small business loans, while Republican Donald Trump's economic roundtable aimed at Latino voters devolved into a tirade of insults against his opponent.
Republican presidential candidate Donald Trump will participate in an interview on Friday with popular podcaster Joe Rogan, who has a devoted following in the tens of millions of listeners.
South Korea warned Tuesday it could consider supplying weapons to Ukraine in response to North Korea allegedly dispatching troops to Russia, as both North Korea and Russia denied the movements.
Prime Minister Justin Trudeau says he doesn't think his leadership is in danger, one day before a highly anticipated Liberal caucus meeting where his future at the helm of the Liberal party is expected to be up for discussion.
On the 10-year anniversary of the deadly Parliament Hill shooting, former sergeant-at-arms Kevin Vickers says there's 'not a day that goes by' where he doesn't think about it.
Former Conservative leader Erin O'Toole says Prime Minister Justin Trudeau 'should move on,' as he faces growing inner-caucus turmoil.
The XEC strain, a hybrid of Omicron subvariants KS.1.1 and KP.3.3, was first detected in Canada in mid-August and the number of COVID-19 cases with the XEC variant has rapidly increased.
With the B.C. election too close to call, Dr. Bonnie Henry was asked Tuesday how she feels about the possibility of a party that has repeatedly called for her firing forming government.
Consumers in Canada are being told to check their freezers after hundreds of frozen waffle products were recalled for fears of a possible Listeria contamination. The voluntary recall was just the latest in a string of listeria-related recalls in North America.
A massive space rock, estimated to be the size of four Mount Everests, slammed into Earth more than 3 billion years ago 鈥 and the impact could have been unexpectedly beneficial for the earliest forms of life on our planet, according to new research.
The estimated population of North Atlantic right whales increased in 2023, but a group of international marine scientists say human behaviour still poses a significant threat to the critically endangered species.
In the fight against cyber attackers, they reason AI can help just as much as it harms.
An initial toxicology report for ex-One Direction singer Liam Payne, who died last week after falling from a third-floor hotel balcony in Buenos Aires, showed that he had cocaine in his system after his death, an Argentine official said.
It was lights, cameras, and action at a beachfront Manitoba community last week as a Hollywood movie shoot took over the town once again.
Former Hollywood producer Harvey Weinstein has chronic myeloid leukemia, NBC News reported on Monday, citing sources.
Quebec television executive Marie-Philippe Bouchard's appointment as the next president and CEO of CBC/Radio-Canada comes with big challenges at the beleaguered public broadcaster, say observers who emphasized the need for renewed trust and a revamped funding model.
Canada's labour tribunal says the federal government's directive to end the countrywide rail shutdown in August marked an 'unprecedented' move.
Small businesses on Prince Edward Island are calling for the removal of the $50.25 Confederation Bridge toll.
A Manitoba company competed against the cream of the crop at the world's largest dairy expo and came out the big cheese.
A manufacturer in Saskatchewan is looking to set a new record by building the world's longest trampoline.
Summer might be the most popular season for tourism to Europe, but it hardly promises a calm, cool and collected experience.
Former Manchester United and Atl茅tico Madrid striker Diego Forl谩n is set to make his professional tennis debut in November, when he will compete in an ATP doubles event in his native Uruguay.
Tua Tagovailoa does not want to be the face of traumatic brain injuries in the NFL, but he knows that's the reality confronting him after his latest concussion.
A parliamentary committee will not question the coaches of the national women's soccer team about the Paris Olympics cheating scandal, after Liberal and Bloc Qu茅b茅cois MPs voted against launching a study today.
An increased risk of fire has prompted the recall of thousands of Honda hybrid vehicles in Canada.
The U.S. government's road safety agency is investigating Tesla's 'Full Self-Driving' system after getting reports of crashes in low-visibility conditions, including one that killed a pedestrian.
Canada鈥檚 border guards have seized more than 1,900 stolen cars so far this year at railyards and ports, which is over a hundred more than in 2023.
Residents of Ottawa's Rideauview neighbourhood say an aggressive wild turkey has become a problem.
A man who lost his life while trying to rescue people from floodwaters, and a 13-year-old boy who saved his family from a dog attack, are among the Nova Scotians who received a medal for bravery Tuesday.
A newly minted Winnipegger is hoping a world record attempt will help bring awareness for the need for more pump track facilities in the city.
A Springfield, Ont. man is being hailed a 'hero' after running into his burning home to save his two infant children.
Hortense Anglin was the oldest graduate to make her way across the platform at York University's Fall Convocation ceremony this week. At the age of 87, she graduated with an Honours degree in Religious Studies.
Looking for a scare with good intentions this Halloween season? The ghosts and ghouls of Eganville, Ont. invite families to tour the Haunted Walk at Lekbor Manor.
The image of a sleepy Saskatchewan small town with 'not a lot going on' is a well-known anecdote. However, one Saskatchewan company is hoping to change that 鈥 and allow communities both on and off the beaten path to share their stories and advertise what they have to offer.
A Moncton, N.B., home has been donated to the Friends of The Moncton Hospital Foundation and will be transformed into a resource hub for people living with cancer.
A Nova Scotia man crossing Canada on foot is passing through southwestern Ontario. Trevor Redmond is perhaps better known as the 鈥楩ellow in Yellow.鈥
Two Vancouver city councillors are questioning why they鈥檝e been ousted from city appointed roles.
The rain has only just stopped pummelling parts of Metro Vancouver, but for the hundreds of residents left with flood-damaged homes, the nightmare is far from over.
Cole Mcleod was home with his roommate in their 21st floor apartment on Monday afternoon when the fire alarm went off in the downtown Vancouver building. Then, he smelled smoke.
The Ontario Nurses' Association (ONA) and opposition leaders at Queen's Park are calling on the government to reduce, or eliminate, parking fees at hospitals for staff, patients and visitors.
Taylor Swift fans from far and wide will head to Toronto next month to see the superstar perform a series of six sold out shows at the Rogers Centre.
A motorcyclist has been critically injured in a collision on the Queen Elizabeth Way in Oakville, police say.
Alberta Premier Danielle Smith says she's waiting for NDP Leader Naheed Nenshi to declare where he intends to run for office before she calls a byelection in Lethbridge.
Bricks along the pathway at Calgary鈥檚 Olympic Plaza have been removed and it wasn鈥檛 by the city. It appears people are coming to grab bricks with their names, family members鈥 name or a saying ahead of the plaza closing.
More than a decade after Colton Crowshoe's death, the case against his killer continues.
An Orl茅ans property that once belonged to a religious order is now in the City of Ottawa's hands.
Residents of Ottawa's Rideauview neighbourhood say an aggressive wild turkey has become a problem.
Passengers on a Via Rail train from Toronto found themselves stuck south of Ottawa for several hours Tuesday because of mechanical issues on the train.
Quebec Premier Francois Legault promised on Tuesday to toughen secularism measures in schools, saying he was 'shocked' by revelations about a Montreal public school where a group of teachers had tried to introduce what the premier described as 'Islamist' beliefs.
The Quebec government wants to hear Quebecers' thoughts about scrapping the twice-yearly time change, but it isn't promising to act on them.
On a night when New York's top line was missing in action, the bit players grabbed the spotlight and led the Rangers to a commanding 7-2 win over the Montreal Canadiens.
Police are looking for a man and a woman who robbed an Edmonton jewelry store earlier this month.
Edmonton Public Schools (EPS) custodians have voted 97 per cent in favour of going on strike.
A new commentary suggests the Government of Alberta purposely pushed false narratives around public safety to scale down safe supply in the province.
Police have confirmed the body of an employee who died at a Walmart in Halifax over the weekend was found in a walk-in oven.
The president of a popular New Brunswick potato chip company has been arrested for domestic violence in Bangor, Maine.
A member of the Nova Scotia Liberal Party is crossing the floor and joining the Progressive Conservatives.
Folks making the trek to and from Thompson along Highway 6 are once again without a bathroom break鈥 at least for now.
The Manitoba government is restoring the 1:1 apprentice-to-journeyperson ratio.
A number of Manitoba communities kicked off the week by breaking decades-old heat records.
Saskatchewan's Conflict of Interest Commissioner (COIC) has found that former Saskatchewan Party MLA Gary Grewal violated legislative rules by profiting from hotels while they were party to government contracts.
A determined group within Moose Jaw has stepped up to provide assistance to those in need 鈥 following the closure of one of the city's shelters.
Saturday's matchup between the Saskatchewan Roughriders and Calgary Stampeders could determine if they clinch the West Division title, however the results from Winnipeg's game earlier in the day could make their matchup meaningless.
Waterloo Regional Police are investigating a sudden death in Kitchener.
No one was hurt after playground equipment went up in flames at a Kitchener, Ont. park.
A bloodstain pattern analyst expert testified Tuesday at Erick Buhr鈥檚 second-degree murder trial.
A Saskatoon family is voicing concerns after paying twice as much PST as expected on a recently purchased truck.
Hundreds of voter information cards have landed in the wrong hands.
A city planning document for the Bus Rapid Transit system (BRT) sparked controversy over the weekend, with three civic election candidates alleging Confederation Mall was at risk of being demolished and replaced with dense housing.
Now that the jury has begun deliberating in the Sudbury murder trial of Felicity Altiman, here are some of the interesting courtroom moments they didn't get to hear.
Greater Sudbury has ended the employment of CAO Ed Archer, Mayor Paul Lefebvre announced suddenly Tuesday evening
After operating for 51 years, General Motors has announced it is closing the Kapuskasing Proving Ground, a facility the automaker used to test the durability of its vehicles in cold weather.
Police said the house is believed to be empty and abandoned and it's not known yet if the driver of the truck is injured.
A father and his two children who suffered severe burns in a Springfield, Ont. house fire have undergone surgery.
A collision between a pickup truck and SUV shuttered the intersection of Base Line and New Road for several hours.
Emergency crews rushed to the scene of a serious collision in Barrie鈥檚 south end involving a passenger vehicle and a motorcycle.
Drivers are asked to be on the lookout for deer and other wildlife crossing our highways.
A 35-year-old man from Etobicoke is facing impaired driving charges after a crash involving a Ministry of Transportation vehicle parked along Highway 11 south.
One week before Halloween a special trick or treat event is taking place in Windsor; the safety village is holding its annual event on Thursday from 5:00 p.m. until 8:00 p.m.
Residents living in central Windsor are calling for after-hours construction to expand a commercial development to stop.
If you live in Windsor, Ont. and get a knock at the door from a political canvasser, it might be surprising since there鈥檚 no election on the horizon at the municipal, provincial or federal level. But across the border, that's not the case.
Mounties in British Columbia say a second person has been found dead after two vehicles ended up in a river on Vancouver Island when a road washed out amid torrential rains over the weekend.
With the B.C. election too close to call, Dr. Bonnie Henry was asked Tuesday how she feels about the possibility of a party that has repeatedly called for her firing forming government.
Premier and NDP Leader David Eby says he's been told by the B.C. Green Party that it's too early to begin talks about a minority government agreement after the weekend's still-undecided provincial election.
Dave Lindsey began growing giant pumpkins to bring a bit of magic to his grandkids' Halloween.
A U.S. District Court judge in Montana has sentenced a 27-year-old man from Kelowna, B.C., to 18 months in prison for using fake names to buy guns with the aim of selling them in Canada.
Nearly two years after a man was stabbed to death in downtown Kelowna, RCMP have made an arrest in the case.
Alberta Premier Danielle Smith says she's waiting for NDP Leader Naheed Nenshi to declare where he intends to run for office before she calls a byelection in Lethbridge.
The health of honeybees will be the focus of a presentation at the University of Lethbridge on Wednesday evening.
Alberta is offering infrastructure funding to help municipalities accommodate recent population growth. The province has added a little over 500,000 people over five years, putting pressure on public services.
The union representing the fire rangers with the Ministry of Natural Resources says money won鈥檛 fix the systemic problems in the workplace.
Rallies by a group called Voices Against Violence took place across the country on Monday, including Sault Ste. Marie.
An Indigenous group in northwestern Ontario shut down the highway for a couple of hours Monday morning in protest after ancestral remains were found at a construction site.
Police in western Newfoundland say a 77-year-old man visiting the province from Kansas is missing after a fire at a hotel in Deer Lake, N.L.
At 2 p.m. on Thursday, the scene at the Lions Club in Clarenville, N.L., rivalled any rowdy St. John's bar that thumps with music late on a weekend night.
A Newfoundland scientist known for identifying a gelatinous, rancid mass that washed up on the island's shores decades ago is hoping to get his hands on a slice of the strange white globs appearing on the province's beaches.
The Shopping Trends team is independent of the journalists at 愛污传媒. We may earn a commission when you use our links to shop.聽Read about us.
