Cancelling your credit does not affect your credit score in any way. However, you must be aware of the certain impacts due to the cancellation.
1. If you close your credit card without paying the outstanding due amount, it could have a negative impact on your credit report.
2. If you have used the credit card for a long time, say 10 years, it has a strong credit history. When you cancel this card, you may not have a chance to improve your credit score. However, cancellation does not affect your current score.
3. When you use multiple credit cards and you cancel one of them, your credit limit is reduced overall. This could lead to higher credit utilisation ratio in the future which can have an impact on your credit score as well.
4. If you use only one credit card and you want to cancel it, it could prevent you from having a credit mix on your portfolio which is one of the parameters in the credit score calculation. It would not affect your current score but may not be helpful in improving your credit score.
When a credit card seems a debt trap, it is absolutely fine to close it. But when you know how to use it prudently, it can give you numerous benefits. Hence make an informed decision about closing a credit card.