Some people, in an attempt to control their spending and get out of debt, believe that closing their credit cards is a smart financial move. But is it?

Having access to credit is actually of huge potential benefit. It’s how businesses are built and fortunes are made. It’s an indication that lending institutions have faith in your ability to make timely payments.

You can actually harm your credit rating by closing a long-standing card. The longer you can show a history of good credit, the better your credit score will be.

Of course there are ramifications of thinking your credit card is closed when you are actually carrying a balance. As well, if that credit card charges an annual fee, you might be surprised by a bill you did not expect. On the whole, you are better off keeping a credit card with zero balance and using it once in a while, and keeping a regular watch on your credit bureau as part of your overall financial management.

Likewise, having access to credit and a complete financial plan to achieve wealth is also a bigger benefit than closing a card. There are only a few times when it might make sense to close a card, such as when it could potentially interfere with other low interest, unsecured access to credit, but for the most part – keeping your cards and monitoring them is the wealth strategy I would recommend.