Here are two important questions for credit card buyers:
How many credit cards do you have?
Do you need them all?
Most consumers carry several credit cards every day, but only use fewer than ever. For most people, two or three credit cards are not all that is needed. All others can be canceled, and probably should be canceled.
One of the best reasons to cancel some of these cards is to reduce your temptation to use them. After all, you can’t put extra debt into something you don’t own. However, before you start cutting out those unused credit cards, consider the following.
Make sure the credit card you are canceling is an empty account. This means that the balance on the card is not zero. If you owe anything to the account, or a few dollars, be sure to pay it off in full before canceling the card.
Peace is gold. If you plan to cancel a card, keep it to yourself. In other words, don't tell the credit card company you plan to leave. This applies if you have an account balance but plan to pay it off and leave. Not always, but some companies can raise your interest rate on that balance if they feel that you are leaving soon.
Being punctual is important. If you plan to apply for a bigger loan in the near future such as a home loan or car loan you may want to hold your old cards (don't use them, just hold on to them). In some cases, canceling a credit card may damage your credit score used at home, in a car, on a boat, etc. If the balance on the old card is zero, simply keep it in stock until after the next transaction. When the task is complete, you can cancel the card.
When it is time to cancel a credit card your first step should be to contact the lender. In some cases, you can cancel the account by phone. In some cases, you need to do it in the mail.
If you cancel by phone and be a good customer do not be surprised if you end up talking to someone who will try to make sure you keep the account open. In some cases, they may even offer you reasons to stay with them. This could include a lower rate, better promotional deals (air miles or phone minutes for example) or any other benefit they feel you can enjoy. If the new rate, for example, is lower than the other card you have, you may want to process your cancellation. If the new benefits do not make much difference, keep canceling.
You should also ask if the credit card company has informed the credit reporting agencies that the account has been closed at your request. Keep a record of the time you called, the date you called, and the name of the person you spoke to on the phone. You must receive, by post, a letter confirming that your account has been closed.
Follow these steps and canceling your old credit cards will not be painful and safe. You will be glad you did this work later when you have a few debts each month.
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