Dave Ramsey Says This Seemingly Simple Credit Card Move Is Anything But

You may reach a point when you decide it's time to cancel a credit card you're not getting much use out of. Generally speaking, it's actually a good idea to keep credit card accounts open if you've had them for a long time. That's because the length of your credit history is a pretty big factor that goes into calculating your credit score. And keeping long-standing accounts active could help your score improve or remain strong if it's already in good shape.

But while it's one thing to keep an old credit card that doesn't cost you anything to maintain, it's another thing to hang onto a rarely used credit card that charges an annual fee. In that case, you're effectively throwing your money away by paying that fee, so it could make sense to close an account like that, even if it means facing a modest drop in your credit score.

But financial expert Dave Ramsey warns that closing a credit card you no longer want may not be as quick or simple as you think. Here's why.

You need to reach out and have a conversation

These days, you can check your credit card balance online and pay your bill online every month. So you'd think you'd be able to cancel your credit card online, too.

But as Ramsey points out, most credit card companies don't allow you to cancel an account online. Rather, you need to make a call, speak to a live person, and cancel your account that way. And that's not as easy.

First of all, you may need to wait on hold or get bounced around to different extensions before you're able to reach a credit card company representative who can actually help you close your account. And from there, you can bet that the person you speak to is going to do everything in their power to convince you to keep your account open.

They might warn you that closing your credit card account will cause your credit score to drop (you may see a small, brief dip in your score). They might also try to get you to change your mind by pointing out all of the perks you'll be giving up, like cash back on your purchases. So you'll need to prepare to stand your ground and go through with your plans to cancel your account if keeping it doesn't make sense financially.

A process that just plain shouldn't be so difficult

You'd think it would be easier to close a credit card account and move on with your life. But credit card companies don't want you to cancel your account. If you do that, they can't make money off of you by charging you various fees and interest on carried balances.

That's why these companies intentionally make it hard to cancel an existing account. But if you're tired of paying for a credit card you don't use, or one that isn't worth its fee, then it's important to take the steps needed to close your account and start saving your money.