A line of credit is often used to finance projects where the exact cost is unknown such as home renovations or it could be used to pay for an emergency that a borrower can't cover. There can be annual fees to keep it open. A person may consider closing it if they feel they are overextending themselves financially or if they have sufficient funds to handle unexpected expenses. Before closing the line of credit, you should check with the lender to see what consequences or benefits may be involved.