Comments on: Cancel Unused Credit Cards

By: Ken Clark - CollegeSavings.About.com

Ken Clark - CollegeSavings.About.com — Sat, 12 Apr 2008 17:56:22 +0000

Not canceling your credit cards is strictly a short-term strategy to keep your FICO up. The main reason is that the lenders now look at what is called the “Balance to Limit Ratio” as opposed to total balance.

If I cancel a credit card with no balance, and keep one that carries one, I raise my overall debt vs. total available number. This makes me look maxed out.

Over the long run though, one card with a low balance is the way to go… Multiple cards with unused balances still presents a major risk to a lender.

If you are going to keep credit cards open in the short-term, there is no reason why you still wouldn’t cut them up if you are not planning on using them. They’re still open as far as the CC company is concerned, but you’re not tempted to use them!

Ken Clark
CollegeSavings.About.com

By: Angel

Angel — Tue, 19 Feb 2008 23:38:03 +0000

Simplify and cancel those unused cards. If you’re not using them why keep them? I paid off and canceled one last year and I was so relieved, one less bill to pay, how great that is! And now I am working towards paying off one more card and then cancellation. One less bill to pay, how great is that!

By: Colin Joss

Colin Joss — Thu, 24 Jan 2008 03:22:43 +0000

I have taking this advice in extreme way. I only have 1 card and don’t think this as good. Actually 2-3 each with its different package and offer should be better.

Colin Joss
East Lothian, Haddington
United Kingdom

By: Dee

Dee — Wed, 23 Jan 2008 00:36:46 +0000

so I’m thinking about canceling my cards, how do I go about doing it. Is there one number or do I have to contact each individual card company?

By: Lord

Lord — Tue, 22 Jan 2008 21:50:05 +0000

There is only so much real estate in my wallet and I have no desire for a card that I will never use. That said, there can be long periods when I don’t use one. One card is for personal expenses, another business, another for routine expenses, and another for backup because being without one if you ever have to cancel one is too inconvenient.

By: RacerX

RacerX — Tue, 22 Jan 2008 19:19:37 +0000

You can really muck your credit FICO score my canceling some cards. Your number needs to see a good mizx of credit along with history. Both of which you could lose.

By: ChristianPF

ChristianPF — Tue, 22 Jan 2008 18:18:03 +0000

For the sake of maintaining some level of organization I have to cancel my unused credit cards. To me the comfort of simplicity is well worth the potential small hit to my credit score… I will always keep at least my oldest credit card open, but the newer ones, I close as soon as I can.

By: Randall

Randall — Tue, 22 Jan 2008 18:15:07 +0000

I love these Devil’s Advocate posts, but this one almost qualifies as a legit view. I went through the ‘kill everything’ phase after a deep Dave Ramsey session, and have had a LITTLE remorse.

My ultimate goal is not to use CC’s at all, but until I get to that point, the FICO score is important for my remaining credit cards. Getting rid of all my empty accounts only hurt me in the long haul. I agree with not keeping cards with annual fees, but any of the others I should have just cut up and forgot about. (Not closing the account, just cutting up the card.)

Once I get EVERYTHING paid off I may have an account-closing-and-plastic-shredding day, but until then I’m keeping the accounts active.

By: Llama Money

Llama Money — Tue, 22 Jan 2008 16:50:04 +0000

This is actually something I’ve been meaning to do. I probably have 45 or so credit cards ( yikes ), and I want to pare that down to 10 or less. Thanks for the reminder of the possible problems by keeping extra accounts open.

By: Lily

Lily — Tue, 22 Jan 2008 16:34:02 +0000

I try not to apply for cards I won’t need. Granted, I’ve only been in the credit card game for a couple of years, but so far I’ve only gotten (and canceled) one card that I don’t regularly use. It was, as a matter of fact, a retail card which I used for a 10% discount. Now I’m down to 2 rewards card and 1 card I use just for a monthly credit score update.

This is a great Devil’s Advocate post, though I still think the decision to cancel depends on the card and the person who holds the card.

By: jayne

jayne — Tue, 22 Jan 2008 14:47:19 +0000

The problem with promotional cards is that the best ones have annual fees. Some will waive the annual fee as long as you use the card, but after about 3 or 4 cards like this, it gets a little silly trying to remember to pull them out of your files once a year to go buy a pack of gum and pay it off.

I think a better strategy is to get a really awesome, no-fees card and develop a good two year history on it. Then, focus more on increasing your line of credit with that one to keep a debt usage ratio. Ask for a LOC increase the moment you get it, and every 3 months after that. After your credit limit reaches a certain point, closing and opening new cards will have a negligible effect on your credit score.