Question about credit cards...

[ravenvii]

Is it true that if you close a credit card account, it hurts your credit history? That it's actually better to simply stop using the card?

I am wondering because I am considering getting a JetBlue American Express credit card so I can get points towards free flights. The card costs $40 per year, however. So I am wondering if I get to a point where I do not use JetBlue flights anymore, and want to cease using the card, would it hurt my credit history if I close my account (and thusly stop the $40 per year payments)?

 

[Heb1228]

Part of your FICO credit score is the total amount of your combined account limits compared to your actual balances. So if you close an account, the ratio of revolving balances to credit limit is higher and usually will lower your credit score. For your best score, your balances should be below 30% of your limits and it starts hurting you noticeably if you are above 50%.

EDIT: It probably wouldn't hurt your score enough to worry about in the case you are describing.