Argument For Not Closing Credit Accounts With Outstanding Balances On Them

Closed Accounts + Outstanding Balances = Trouble

Although it’s better to close a Credit Card Account than allow it to go to collections, you should only close an account as your last resort.  Credit Card Companies don’t like it when you close your account with them with an outstanding balance. 

Many of them will never admit this, but Credit Card Companies hold it against you if you close an account with an outstanding balance on it.   When you close out an your account with an outstanding balance, your other creditors may see this as your lack of ability to meet your financial obligations, and your ability to secure more credit may become much more difficult.  In essence, closing out an account – voluntarily or involuntarily, with an outstanding balance, makes a financial statement that you may no longer be credit worthy. 

If you can, pay your balance before you close out any Credit Account.