No not necessarily. In fact, it will lower your debt to credit ratio and help your score.

They may have been thinking about closing out an account rather than paying it off. Closing out a credit card you have had for some time and/or has a high credit limit increases your debt to credit ratio and your FICO score will take a hit as a result.

Be aware that a lot of credit card companies are closing accounts for dormancy, so if you do pay off your account, make sure you use it occasionally for small purchases and pay it off over 1 or 2 months. That prevents the creditor from labeling you a "deadbeat" (that is what they call people these days who pay off their accounts in full every month or don't use their cards, because they are no longer making money off of you) and closing your account.

Edit: To the poster below me, you may wish to read this and watch the video:

http://moneywatch.bnet.com/economic-news/blog/financial-decoder/credit-card-reform-stinks-for-responsible-consumers-aka-deadbeats/287/

Millions of credit card holders with good credit have had their cards canceled outright for paying in full and on time and not using them up to the standards of the creditors.

More info here: http://moneysavingcreditcardsecrets.com/blog/2008/09/17/punishing-deadbeats/

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