Canceling card does not help credit: report

You may want to think twice before canceling your credit card.

Canceling a credit card negatively affects your credit score - but a new report found that millions of Americans don't know that.

Roughly two-thirds of Americans have canceled at least one credit card, and nearly 40 percent of those people have canceled more than one, according to a bankrate.com report. Twelve percent of people who canceled their cards thought it would help their credit score.

The most popular reasons for canceling a card, the study found, was having paid off debt. Other reasons included not using the card enough or feeling that the interest rate or annual fees were too high.

Credit scoring systems look favorably on longstanding accounts and more available credit. So, as long as there's no annual fee, just stop using the card instead of canceling it.