B.C. tenants evicted for landlord's use after refusing large rent increase to take over neighbouring suite
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
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’re a trustworthy borrower who pays their debts on time. Conversely, carrying over large balances, missing payments, or applying for too many credit cards in a short amount of time can hurt your credit rating, according to Equifax.
What about old credit cards, though?
According to Equifax, some of the key factors 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’s 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’t 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’s website, you’ll see that the age of your oldest credit card accounts for 15% of your total score. If the card you’re 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’re thinking of cancelling is not your oldest card, then this credit rating factor wouldn’t 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’t 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’re 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 indicate that Canadians’ consumer credit card debt increased by 17.5% in early 2022. If you have a spending problem that can’t 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’re 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.
Ashley Dickey and her mother rented part of the same Coquitlam duplex in three different decades under three different landlords.
A man who fell into a crevasse while leading a backcountry ski group deep in the Canadian Rockies has died.
A new survey by Dalhousie University's Agri-Food Analytics Lab asked Canadians about their food consumption habits amid rising prices.
MPP Sarah Jama was asked to leave the Legislative Assembly of Ontario by House Speaker Ted Arnott on Thursday for wearing a keffiyeh, a garment which has been banned at Queen’s Park.
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
As Donald Trump was running for president in 2016, his old friend at the National Enquirer was scooping up potentially damaging stories about the candidate and paying out tens of thousands of dollars to keep them from the public eye.
After Prime Minister Justin Trudeau said the federal government would still send Canada Carbon Rebate cheques to Saskatchewan residents, despite Saskatchewan Premier Scott Moe's decision to stop collecting the carbon tax on natural gas or home heating, questions were raised about whether other provinces would follow suit. CTV News reached out across the country and here's what we found out.
A Montreal actress, who has previously detailed incidents she had with disgraced Hollywood producer Harvey Weinstein, says a New York Court of Appeals decision overturning his 2020 rape conviction is 'discouraging' but not surprising.
Caleb Williams is heading to the Windy City, aiming to become the franchise quarterback Chicago has sought for decades.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”
At 6'8" and 350 pounds, there is nothing typical about UBC offensive lineman Giovanni Manu, who was born in Tonga and went to high school in Pitt Meadows.