Do you remember the excitement about your first credit card? You may apply for a credit card during your studies or your parents may give you advice. Either way, you've got this card from your teens or early 20s and it's probably not the best card in your wallet. There may be a high interest rate, no bonus, or a high annual fee.

Once you start to build a good credit score, chances are good that you have been offered a better credit card. Your interest rates are lower, you may have no annual fees or low fees, and you may have access to airlines or millions of prizes. So why keep a card that no longer serves you?

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How does account closing affect my balance?
It is important to remember that if you decide to close a credit card account, you reduce your credit utilization rate. Remember that loan withdrawals are 30 percent of your total bill. You need to reduce your spending habits when you close your credit card account or you may exceed the recommended usage rate of 30 percent, which will cause your credit score to drop.

The average age of your credit account is another important factor in your credit rating. That's double. If you are new to lending, it is best to leave the old card open as it will remain on your loan for 10 years. While this card is rarely used, it actually helps your credit - especially if you have a good payment history. Closing it can hurt your credit much worse than someone who has been building their credit for over a decade.