It’s a reality that most people today own one or two credit cards. This credit card is a big help especially when making huge purchases and when cash is not readily available. The only downside is the interest fees that card holders need to deal with.
Owning different
types of credit cards can be okay if you know how to handle them well. Self-discipline is very important in this case. It’s not advisable, though, to keep on opening new credit card accounts that offer lower interest rates and other perks and then still keeping the other cards. Always make it a point to close cards that you no longer want to use.
Closing unused credit cards provides several benefits. It helps you monitor your other cards better, it makes your credit report cleaner and makes you more qualified for loans, it helps you avoid paying unnecessary fees and most important of all is that you keep yourself away from being victimized by identity theft.
Steps to take
There are do’s and don’ts to follow when you decide to close some of your credit card accounts. Take it one step at a time to make sure that your credit report is not affected.
Close your unused credit cards. This will help you not become a victim of identity theft and not paying annual fees for cards you no longer use. Check your credit report afterwards to be sure that the accounts have been marked as closed or to correct any errors. Verify if there are late payments and high balances.
If there’s one credit card account with a current balance that you want to pay off and no longer use, you can always cancel it afterwards. This will keep you from spending more using that account and it will also lower your amount of available debt especially when applying for a loan.
Do keep several credit card accounts open to maintain a good credit score and balance your debts. Continuous credit activity and responsible credit use are positive signs considered by most creditors. Use your card wisely to keep a favorable credit rating.
Use one card only for your regular purchases and be sure to pay on time every month. It would be best if you pay the balance off each month so you won’t need to worry about carrying a balance when using your other credit cards. Designate another card for emergency or specific purposes such as vacations and business trips.
Avoid closing your oldest credit card account as this could affect your credit score and credit history. You can maintain it and use it on special purposes only. If you’re no longer comfortable with its high interest rate, you can try calling the credit company and request for a reduction of the APR.
Don’t forget to destroy credit cards which you have canceled. Cut the card into pieces to prevent unscrupulous people from stealing your card and reopening your account.
Finally, don’t expect your credit card accounts to close automatically. You cannot close an account by simply calling the customer service. As a cardholder, you need to write a letter to the company informing them of your desire to close your account. The customer service will normally confirm that the account is closed within10 to 15 days.
Learn about the different
types of credit cards available and
better credit card management.
