Not sure if you should cancel a credit card? Laura answers a listener question and gives you five questions to ask that will help you know whether closing a credit card will barely affect your credit scores or end up hurting your finances.
What to Do With Unused Credit Cards
If you go through these questions and determine that you should not close a credit card, simply use it to make a small purchase from time to time that you pay off in full, so it stays active.
There isn’t an exact number of active credit cards you need to build or maintain excellent credit. But you may need a low-rate card for times when you must carry a balance and a higher-rate rewards card for charges that you always pay off each month.
No annual fee cards are best, but some of the best rewards cards may charge a fee. It may be worth it, depending on the benefits you’ll get from the card.
The bottom line is that how you open and close cards directly affects your credit scores, so you need a solid strategy to protect your credit.
Related Content: What to Know Before You Cancel a Credit Card
To learn much more about credit, download the Credit Score Survival Kit. It’s a free multimedia resource I created as a gift for you with a video tutorial and 3 smart strategies to build excellent credit scores (that you can real or listen to). Plus, I tell you how to save money by getting your credit score absolutely free as often as you want.
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There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page. Here are all the many places you can connect with me, learn more about personal finance, and ask your money question:
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- Money Girl on the Stitcher app (also free to subscribe!)
- Email: LauraDAdams.com/contact
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