Keep or Cancel Credit Cards?

November 9, 2007

When your debt free will you keep or cancel your credit cards?

I was having this discussion with people the other day.  A point to keep them open was to keep your credit score up and to not even cancel them while getting out of debt.  That is a valid argument…..I guess.

Cancelling each card as I’m getting out of debt is what I’m doing and applying for new cards for one reason or another is something else that I’ve been doing.  Moving balances around or applying to get something from them.  I don’t really care right now as I’m getting out of debt if my credit score gets dinged since incurring more debt isn’t an option.

The discussion ensued of whether to keep credit cards open while paying the balance off each month or not having any at all.  For me I plan to cancel all credit cards and not use them again, but I’ll admit my wife asked me the other day about using one to get 15% off plus another coupon and then paying the amount in the store immediately after.  I’m still mixed on how I feel about that.  My response was with buying a car, even though I can pay cash for a vehicle maybe only paying for half and financing the other for like a year or something and then paying it off in 6 months.  I’ll have to check into that more but doing small loans like that should be enough to keep my credit score up and even though I’ll pay a small amount in interest in the long run it could benefit me.

What’s your thought?