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Honestly, your answer didn't help me at all. You don't know me. You don't know the reasons behind the debt. The hardships my family had. I was simply hoping for an answer that helped me decide if by closing these cards my credit score would be damaged. That's it. Instead I got "learn how to use credit cards."

There was no way to tell if your credit score would be damaged by closing the cards, given the little information you had provided.
And by saying things like But honestly, I'd rather take the hit to my credit score than ever use these things again. I see the benefits of using them (especially if they have rewards) but I really just want to put these things away and forget they exist. you didn't seem to actually be asking about whether your credit score would be damaged by closing the cards - more about whether you would be better off closing the cards.

The additional information you provided about cutting cable and doing other budget cuts now (rather than when you were building up and/or paying down credit card debt) suggests that you probably will still be better off closing the cards until you have an emergency fund built up to deal with hardships. Therefore, I still stand by my answer, that since, for whatever reason, you built up credit card debt and chose to borrow from your FIL to 'pay the cards off,' rather than paying them off on your own, you would probably be better off living without them for a couple of years, until you have lived with a budget and built up an emergency fund. As you can see, several others also suggested living without the cards for a while, too.

AJ
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So, I was finally able to pay off all my credit cards (full disclosure dad-in-law loaned us the money) this week.

Sorry, that's not really 'paying off debt' - that's transferring from owing credit card companies to owing your FIL.

Benefits
- FIL probably charges lower interest rate (if he charges interest at all), and probably no late fees

Downsides
- The potential for really ugly family drama and resentment, among/from a lot of family members - not just FIL, if you don't actually pay him back.
- By using other people's money to pay off the credit cards, rather than doing the hard slog of paying them off yourself, you don't appear to have actually learned your lesson on how to manage credit cards properly

Of course, my first instinct is to CLOSE THEM ALL(!!!), but after researching it appears that it's best to keep at least some open. I kind of understand the reasoning behind that, but still need guidance.

I have 3 cards now at $0 balance and none have a yearly fee.

Card #1: $4,500 limit (open since 2014)
Card #2: $6,500 limit (open since 2015)
Card #3: $4,000 limit (open since 2011)

Is it best to keep them all open? two? one?

I've seen some sites recommend using at least one of the cards and paying it off each month. But honestly, I'd rather take the hit to my credit score than ever use these things again. I see the benefits of using them (especially if they have rewards) but I really just want to put these things away and forget they exist.


In your case, since you don't appear to have actually learned how to use credit cards properly, I'd suggest closing them all, and learning to live on a strict budget first, as well as building up an emergency fund. Once you have a couple of years of actually living on a budget under your belt, and your emergency fund in place, then you can think about whether you want to try to learn how to use credit cards.

AJ
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I was finally able to pay off all my credit cards (full disclosure dad-in-law loaned us the money) this week

Bumming off the in-laws is actually a worse choice. You took a step backwards.

And asking us if you should keep around some of the poison that set you back is mildly amusing, when you already know what to do. "Man up" and solve the problem yourself.


🆁🅶🅱
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Thank you, AJ. I never said the words "paying off my debt." I realize that I'm trading one debt for another but this was a no-brainer decision.

Honestly, your answer didn't help me at all. You don't know me. You don't know the reasons behind the debt. The hardships my family had. I was simply hoping for an answer that helped me decide if by closing these cards my credit score would be damaged. That's it. Instead I got "learn how to use credit cards."

I'm new to the forum so maybe that's just how people talk to each other around here.
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Thanks. I've obviously come to the wrong place.
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I would keep at least one card for places that are easier to use than debit cards or cash like hotels and rental cards. I would keep two cards in case one has a fraudulent charge made against it like when traveling. It helps to have a spare.

PSU
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Thank you.
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I think keeping older cards is better for your credit scores but there isn't a significant age difference in the 3 cards that you posted.

PSU
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I think keeping older cards is better for your credit scores


Yes - age of the account seems to be important according the sites I've been to. Thanks again, for your feedback. It's much appreciated.
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Hi Stabba

Wellllll... get a flame resistent suit?

The short answer is that only you can really decide if closing the cards is the "right" move.

First, for me, would be to NOT be hasty. Personally, I would put them away for 6 months, date it! And after the 6 month period, re-evaluate. Ask FIL to be your advisor!

Go to Wikipedia and search for "FICO score".
You'll find a pie chart that tells you how much percent wise the cc available credit make up.

https://en.m.wikipedia.org/wiki/Credit_score_in_the_United_S...
Capacity used is 33%; on time payments is 33%.

Hint: FICO is not your friend. It's used by the finance industry specifically (and other industries such as renting an apartment, etc) to screw people.

If you close the accounts, there will unintended consequences for other parts of you financial life, due to the unintended ways that FICO is used - probably not to your advantage.

Do you have an agreement with FIL for repaying the loan?
When will you have FIL paid back?

Do you and StabbaSpouse have a budget on which you both agree?
Do you have other debt?
What are the priorities for paying your bills, FIL debt, other debt?

Can you trust yourself and StabbaSpouse to put the cards away and not use them?
Could you put them in a sealed envelope and give them to FIL for keeping unless there is an emergency that HE AGREES is an emergency?

Can you trust yourself and StabbaSpouse to use a card in a controlled way? Say, only for gasoline for the car... And pay it off, in full, each month? Can you and spouse sit down each month and discuss the budget and where y'all are on it?

Good luck.
and look for nuggets of wisdom in the replies?
ralph
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"Wellllll... get a flame resistent suit?"

Hi Ralph - I'm just sitting here with embers floating off of my charred body.

Luckily, my credit is good due to on-time payments and long credit history so I don't have to repair my credit. Like anything in life though, you always want to improve something. Hence the question about the credit cards.

Yes, I have an agreement with FIL including a fancy amortization schedule! :) Time to pay back is 18 mos., but will probably be earlier due to us cutting cable, one car loan ending, and other budget cuts.

Other than FIL, the only other debt we will have is a second car note and mortgage.

Using the cards will not be an issue going forward. Still would still be nice to close them and give them the scissor treatment. :)

Thank you so much for the response.

Daryl
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I'd keep the accounts, but put the CC's away in a safe place (hmmm...at FIL's place?!). Might need to use them once or twice a year to prevent the accts being closed on you. If you ever need to rent a car or stay at a hotel, I think you'll need a credit card.

Are you repaying your FIL? At a monthly amount you can afford? Would you like assistance putting together a budget? that's something we're very good at here. (For example, are you aware that you can actually live a long time without new clothes, cable, or eating out?!)
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Thanks Alstroemaria -

Yes - we have a payment plan worked out with him, with due date and everything. We're treating him as a bank. A bank that I occasionally spend holidays with. :)

Thanks for the budget help offer. We are cutting the cable cord, and alongside that we have a some other moves we made. Finishing up a car loan (even though it's not too much)is going to really help as well.

Thanks for the response!

Daryl
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Honestly, your answer didn't help me at all. You don't know me. You don't know the reasons behind the debt. The hardships my family had. I was simply hoping for an answer that helped me decide if by closing these cards my credit score would be damaged. That's it. Instead I got "learn how to use credit cards."

There was no way to tell if your credit score would be damaged by closing the cards, given the little information you had provided.
And by saying things like But honestly, I'd rather take the hit to my credit score than ever use these things again. I see the benefits of using them (especially if they have rewards) but I really just want to put these things away and forget they exist. you didn't seem to actually be asking about whether your credit score would be damaged by closing the cards - more about whether you would be better off closing the cards.

The additional information you provided about cutting cable and doing other budget cuts now (rather than when you were building up and/or paying down credit card debt) suggests that you probably will still be better off closing the cards until you have an emergency fund built up to deal with hardships. Therefore, I still stand by my answer, that since, for whatever reason, you built up credit card debt and chose to borrow from your FIL to 'pay the cards off,' rather than paying them off on your own, you would probably be better off living without them for a couple of years, until you have lived with a budget and built up an emergency fund. As you can see, several others also suggested living without the cards for a while, too.

AJ
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One option is to keep the accounts but cut up and dispose of the cards. The accounts are there helping your credit score but you have no easy way of accessing them. You could of course call and have the cards replaced but that usually takes a couple of days at least. If you have the account memorized you could still use them online, but if you are like me a 16 digit number tends to fade quickly with time.

Regarding what is best for you only you can decide.

Personally I consider things like my phone bill a debt, and do not believe anyone is truly "debt" free. The most you can achieve is to eliminate any loans and revolving debt. I have done this, plus I run a credit balance on most of my utility bills. Yet I still have two credit cards that I use for almost everything including my phone bill and other utilities. They both get paid automatically in full each month. (I must admit that I did have a hiccup in this plan a couple of months ago.) However, I could not care less what my credit score is as I pay cash for cars, do not rent, and have no need for any revolving debt.

The advice to keep an account open presupposes that you will "need" access to credit in the future. Only you, and your spouse, can decide that. Some people have gone cold turkey closed every account and never looked back. There are many of that type that populate this board and they are quite successful. There are others more like me that use credit cards and pay them in full each month. WE are also successful. Then their are a few that use short term low interest rate finance offers to fund investments, and some of them are also successful. The point is YOU MUST FIND OUT WHAT WORKS FOR YOU. I suggest that to do so you think carefully about what your goals are. "Getting out of debt" has a nice ring but means little with regard to goals that really matter, "secure retirement, enjoying life, providing college for kids, etc." Think more about these life goals and how having or not having credit cards will influence your actions in the future as you work toward that goal.

And do not take any comments from this board as gospel or as a personal attack. Most if not all are genuinely trying to help. But we can be a prickly lot.....
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I concur with keeping your accounts but cutting the cards up. But if you find yourself using it online that really doesn't help. So, disipline is key. If you DO use them, use for small amounts on items of "NEED" you'd need buy anyway and.. PAY ANY OFF MONTHLY. That can acually help improve your score over time.

If you can't maintain this disipline & pay off any small amount monthly, CANCEL the accounts. End of story.
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cut up and dispose of the cards

Good thought... but that only applies to "bricks and mortar" establishments. It does nothing to limit online purchases or accounts that have your CC number on file.

When it come to a point of requiring your in-laws bail you out, one needs to recognize that drastic changes are required. Close the accounts. FICO means nothing. Don't get taken in. If you need a card transaction, get a debit (or prepaid) card.


🆁🅶🅱
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Close cards 1 & 2. Keep account 3 open. Schedule a utility bill to be paid to the credit card, put the card on autopay, and place the card in a ziplock bag then freeze it in orange or grape juice.
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Personally, I would either follow the literal 'credit card freeze' approach (you put them in a zip lock bag, fill with water and toss whole thing in the back of the freezer) or physically destroy the cards so you can not use them (unless you memorize/write numbers down, of course)

I like keeping them open for two reasons: 1) keep and build up a history of credit and 2) having more available credit (to a point--there is such a thing as having 'too much credit') means future--hopefully well managed--credit usage wont be so severe in terms of overall credit utilization

Good luck-- I made mistakes early in my adult life with credit. It was a painful lesson, and this website played a HUGE role in me clawing my way out of it. Folks back then were a little less 'in your face', but even the somewhat aggressive posts earlier are valid: I had to really work hard to change my relationship with credit and my overall behavior in terms of budgeting.
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I have always kept card accounts open (destroyed the cards) and eventually the credit card company will decide it's time to cut you loose. For some reason it makes me feel better, and my credit rating is beyond excellent. I've always heard it will ding your rating if you close them.
JK
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I've always heard it will ding your rating if you close them.

Sorry, that is a myth. It depends completely on what the rest of your individual credit file looks like - age of the accounts you are closing, age of accounts (if any) remaining open, remaining available credit, how much of that credit you've utilized, mix of other open accounts, etc. There are too many factors that can influence your credit score to say "Closing an account will always ding your score."

If one of the reasons given in your credit score report is "too many open accounts" then closing an account could actually improve your score. On the other hand, if one of the reasons given in your credit score report is "utilization of available credit too high" then closing an account that will reduce your available credit will probably decrease your score. Or, it could be that there is enough history and other available credit that closing an account will have no impact, either positive or negative, on your score.

So, as with almost everything credit scoring, the answer is "it depends" and unless someone provides specifics about the reasons on their credit scoring report, it's difficult to predict what will happen to their credit score if an account is closed.

There are several credit score simulators available that can be used to estimate the impact closing account(s) will have, but even those get it wrong sometimes.

AJ
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Roy says:"When it come to a point of requiring your in-laws bail you out, one needs to recognize that drastic changes are required."

I took the OP's OP as "we recognized our finances came to the point of needing drastic changes, therefore we reached out to the in-laws. Part of those changes needs to be WRT how we use our CCs."

I APPLAUD the OP and spouse. And the in laws for being a family, and ACTING like a family.

The OP has revealed that they have an amortization plan with FIL, and intend to follow it. Good for them!

OP, if you are still reading, make certain you honor this agreement, FIRST, each month. This TRUST is a gift. Build on it and your family will be stronger. 🙂. Your family (in laws, siblings, parents, etc) is a lot more interested in your success than any bank/insurance/loan/etc company.

OP and spouse are exploring the pros and cons of CCs. Good for OP and spouse!

A debit card carries a large risk: If anyone hacks it, steals it, etc, then the owner is often financially responsible for whatever the thief does with it. The only real limit is how much is in the bank account to which the debit card is attached?
A CC fraud loss is often limited to some nominal amount (mine is $50, total).
A prepaid card loss is limited to the amount on the card?

🙂
ralph, who thinks family should help family, if possible.

Yeah, we read about the horror stories, but usually don't hear about the success stories.

I have been helped by family and repaid the loan (amortization table) etc. In order to build my house, cause banks etc won't lend money to a self builder.

I have also lent money to family. Some was a success, one was a disappointment.
I only lend what I can afford to lose.

FWIW 🙂
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<<Card #1: $4,500 limit (open since 2014)
Card #2: $6,500 limit (open since 2015)
Card #3: $4,000 limit (open since 2011)

Is it best to keep them all open? two? one?

I've seen some sites recommend using at least one of the cards and paying it off each month. But honestly, I'd rather take the hit to my credit score than ever use these things again. I see the benefits of using them (especially if they have rewards) but I really just want to put these things away and forget they exist.

Thanks so much! >>


Personally I've never had more than one credit card, which I pay off in full each month.

I value avoiding the nuisance of additional cards, and the risks of having accounts out their dangling, waiting to cause problems.

That's my bias.


Seattle Pioneer
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<<Luckily, my credit is good due to on-time payments and long credit history so I don't have to repair my credit. Like anything in life though, you always want to improve something. Hence the question about the credit cards.
>>


I don't give a fig about my credit score.

In my view, that's one of the luxuries of financial independence.

The idea that I would structure my life to get a higher score from a faceless computer program ----now THAT is obnoxious.



Seattle Pioneer
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Personally I've never had more than one credit card, which I pay off in full each month.

I value avoiding the nuisance of additional cards, and the risks of having accounts out their dangling, waiting to cause problems.

That's my bias.


Seattle Pioneer


Keeping two is of value for those of us that use credit cards for convenience and travel. Eventually, there will be problems with an account probably at the worst time. Step-son had his only credit card compromised when he needed to travel.
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When I was self-employed, I kept a business credit card and a personal one. That way all my expenses were captured and made doing my financial statements and taxes much easier.

Mara
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Hello

I may be in a minority here, but my first reaction is “keep all of them”, but either shove them in the freezer (slip into ziplock bag and freeze in a Tupperware container full or water) or give them to your FIL to hold for you. (Anything to make them very hard to use.). Here is my rationale. Please note that I have four credit cards:-

1). I have one card that I use exclusively for overseas travel. (I live in Britain, so everywhere is “overseas”.). Unlike most cards, it does not charge a fee when used in a foreign currency nor do they load the exchange rate used for conversion.

2). Card 2 is my everyday card. It’s the one I use for travel “in country”, for internet purchases, for any big spends and for purchasing fuel for our cars. It is issued by a major supermarket chain and gives “loyalty points” for every spend. These translate into money off vouchers every 2 months, which I can either use at the supermarket or at one of their partners. Every time I buy something on this card, I log into my bank’s app and transfer the payment over immediately, so it never carries a balance.

3). Cards 3 and 4 regularly offer 0% balance transfers, sometimes for as long as 24 months. Not a big deal when you don’t have debt to pay down BUT instead of taking out car loans, I have used/abused Card 2 to purchase two vehicles over the years and then utilised a 0% balance transfer. Yes, a 0% balance transfer comes with an upfront fee, usually 3%. However, I can’t get a loan for 3% per annum, so this is by far the cheapest way for me to borrow for a major purchase when I don’t have sufficient savings. Also, I maximised the points earned on card 2. (NB: my last car was written off by a numpty driver while parked on the street. The “Car Fund” only had a couple of grand in there at that point, so I utilised Card 3’s 0% offer for 18 months, paying off as much as possible in that time, before transferring to Card 4 on another 0% offer.)

You mentioned in another post that you have worked out a repayment schedule with your FIL and have cut cable, etc, in order to pay off your debt to him. Please post your budget. One thing the CC board is really good at is picking apart budgets. They’ll find you some extra pennies to save as well as picking up on things you may have forgotten to include.

HTH

- Pam
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Personally I've never had more than one credit card, which I pay off in full each month.

I value avoiding the nuisance of additional cards, and the risks of having accounts out their dangling, waiting to cause problems.


I have 2 bank cards. I use one for auto-billing things like utilities, and the other for shopping. I also have a target card for the 5% discount--it's my closest store so I shop there often.

I had a card for a local dept store, but I just closed it last week. I was using it only once or twice a year.
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I don't give a fig about my credit score.

I believe landlords and assisted living joints (and therefore presumably senior independent living and nursing homes) check--they also run a background check, so you might care some day!
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Finishing up a car loan

I suggest when it is finished that you continue to pay that amount to a savings account to save for your next car.

Say your loan was for 4 years and your payment is $250/month. Afver the loan is paid off, you'll save $3k/year (plus interest?) for a new car. After 8 years--when your car is 12 years old--you'll have $24,000. Even if you had to buy in just 3 years, you can buy a nice used car for $9k. I would urge you to get off the car loan dependency track. I note that my own car is 10 years old, and although it's our only car (hubby & I are retired, and he doesn't drive any more), I have no near-term plans to replace it. I have enough earmarked for my next car to buy a modest new one--patience is a virtue (so is not being into high status cars ;-)

Speaking of cars, one reason to have an emergency fund is for major car repairs. Maintenance--from oil changes to new tires every few years, a new battery once or twice in a car's life, even major scheduled maintenance--should ideally come from ordinary living expenses in a well-designed budget. But the rare expensive repair should be covered by your e-fund and not turn into revolving debt on a credit card.
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What I have done is put those other credit cards away and just use one of them. I put the unused credit cards in my "go-to" box that contains important information I may need if I had to leave the house immediately in case of an emergency.

I use one credit card because it simplifies things and I can access monthly,quarterly and yearly expenses to compare and modify if need be.

I think it might be wise for people who've had problems with credit cards to cut up the rest of the cards, keep one in safekeeping but don't use it, and pay with cash or check to keep a realistic view of the fine balance between income and expenses.....what you can actually afford.

Lucky Dog
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Hey- SP, look- you have balloons!


peace & anniversaries
t
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"if one of the reasons given in your credit score report is "utilization of available credit too high..."

AJ - Yes, this is exactly what my credit score report says. I didn't provide that info earlier, but that was why I was asking about opening or closing the cards.

I had not heard of the credit score simulators. That's fascinating, and my search for those.

Thanks for the input, I appreciate it.
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I APPLAUD the OP and spouse. And the in laws for being a family, and ACTING like a family.

Thanks, Ralph! :)
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Thank you to everyone for the great advice, even the salty ones. :)

It's been a tremendous help to me, and I sincerely appreciate it.
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"if one of the reasons given in your credit score report is "utilization of available credit too high..."

AJ - Yes, this is exactly what my credit score report says. I didn't provide that info earlier, but that was why I was asking about opening or closing the cards.


I would suggest waiting to look at your credit report until after the credit cards show a $0 balance to see what the reasons are. If you have $0 in balances reported on all of your credit cards, it's much less likely that one of the reasons will still be "utilization of available credit is too high"

I had not heard of the credit score simulators. That's fascinating, and my search for those.

Try creditkarma.com and quizzle.com I think there used to be one on bankrate.com but I'm not sure it's still there any longer.

AJ
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"Try creditkarma.com and quizzle.com I think there used to be one on bankrate.com but I'm not sure it's still there any longer."

awesome - thanks!
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I'm new to the forum so maybe that's just how people talk to each other around here.
******************
Many here are very up front. Some can go beyond that. Good luck with your CC issues!
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Keep in mind that if you close out a credit card, your clock starts ticking for having frequent flyer miles expiring (if you have an airline-branded card).

Probably a minor issue, and normally takes 18 months, but I've heard horror stories of people sitting on boat loads of miles for airlines they don't fly, only to have them disappear.

You can do something as simple as donating a few hundred miles, and that will keep your account active.

May not apply here, but thought I'd mention. Combo of closing a cc + not traveling much is the recipe for miles expiring.
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