Should I cancel my credit cards?

[josephadel_3]

PM = Precious Metal, I think with respect to your question.

Keep an Amex, and a Visa. The nice part about American Express is if you have problems, they are really good about siding with you, returning your funds, and making an angry merchant sort things out.

Keep a Visa because not all places take American Express. Just remember there is a big difference between an Amex charge card (The little Green/Gold/Red/Platinum/Black Centurion---depending on how big of a baller you are) which you have to pay off every month, and their credit card "Amex Blue" which operates like a normal credit card with a min payment.

Let's see, I have a visa debit card that functions the same as a credit card, except it has a PIN number, and a Chase Mastercard which I feel dirty having, you know the whole Morgan Chase thing... And also a Capital One card I never use.

 

[Maverick]

I bought gold and silver with my debit card once. Is that bad?

I don't know, but it sounds alright. I mean, when you use a debit card, that's money that you already have in your account. As long as you didn't overdraft your account or anything silly like that, you're probably fine.

 

[[email protected]]

Keep this in mind at all times too. When using credit cards people spend 30% more than if they use cash. The "only use it for what you can afford and pay it off each month" argument does not account for this. Credit cards are a losing proposition. Save up $1000 as an emergency fund starter and then cut them up. Just keep reminding yourself that all of the interest and fees are going into the pockets of the big banks that are owners of the Fed. That alone should motivate you to cut them up, close them out, and never use one again. We did that 3 years ago and it feels great.

 

[josephadel_3]

Keep this in mind at all times too. When using credit cards people spend 30% more than if they use cash. The "only use it for what you can afford and pay it off each month" argument does not account for this. Credit cards are a losing proposition. Save up $1000 as an emergency fund starter and then cut them up. Just keep reminding yourself that all of the interest and fees are going into the pockets of the big banks that are owners of the Fed. That alone should motivate you to cut them up, close them out, and never use one again. We did that 3 years ago and it feels great.

Your post caused me to find this from Ramsey. I think your post was the most influential.

From: http://www.cbsnews.com/stories/2007/11/13/earlyshow/contributors/daveramsey/main3493749.shtml


JIM writes, "I'm no longer using credit cards, but am unsure what to do with the accounts they are connected to. Do I go ahead and cancel those accounts, or just leave them dormant? Just wondering if doing one or the other will benefit my credit score when I go to apply for a mortgage. Thanks!"

Yea! Ramsey is very excited for this guy -- he's seen the light and has decided to do away with his cards altogether. As soon as possible, shut your cards down completely. Simply having credit cards doesn't help your FICO score; you have to actually be making payments. If you leave the card accounts open, you're an accident waiting to happen -- you might fall back on the cards yourself, or an identity thief may go to town on the dormant accounts.

 

[AceNZ]

What did you do? What should I do?

What I did is to cancel all of my cards except one VISA, which I mostly use for online purchases. The card pays a 1% cash rebate each month, which allows me to buy some items at slightly below their cash price.

I can highly recommend that approach. There's really no need to have more than one card. Keep things simple.

 

[[email protected]]

What I did is to cancel all of my cards except one VISA, which I mostly use for online purchases. The card pays a 1% cash rebate each month, which allows me to buy some items at slightly below their cash price.

I can highly recommend that approach. There's really no need to have more than one card. Keep things simple.

Use a debit card instead.

 

[AceNZ]

Use a debit card instead.

Actually, in New Zealand I use EFTPOS much more than VISA. It's sort of a cross between a debit card and an ATM card, since you can also use it to get cash at most retailers, without any extra fees.

I would happily replace my credit card with a debit card if I could find one that offers a 1%+ rebate.... PayPal used to offer something like that, but I'm not sure if they do any more.

 

[rodo1776]

As long as the cards are no fee keep them. Just stay disciplined and pay them off every month.

Good credit scores can be valuable especially for younger people.

When I lived in the states I had over 40 cards and good credit (for other reasons as well) and this helps in car insurance and other things. never really used them but every month rotated calls to each card company and asked to increase my limit. They always would.

I kind of liked just seeing how much total credit I could get them up to.

Although now with identity theft this is something you have to watch out for.

Also a friend of mine kind of jokingly said one time. ""hey if you get terminal cancer just think of the party you can have on the way out with all those cards and never have to pay the bill"

I kind of liked that idea. Glad I never had to follow through on it.

 

[Jason726]

I have a discover cash back rewards card. I get 1-5% cashback, and I use it for all my fixed expenses and random purchases. As long as I pay it off every month and don;t get charged interest, I actually make money from it.

 

[josephadel_3]

As long as the cards are no fee keep them. Just stay disciplined and pay them off every month.

Good credit scores can be valuable especially for younger people.

When I lived in the states I had over 40 cards and good credit (for other reasons as well) and this helps in car insurance and other things. never really used them but every month rotated calls to each card company and asked to increase my limit. They always would.

I kind of liked just seeing how much total credit I could get them up to.

Although now with identity theft this is something you have to watch out for.

Also a friend of mine kind of jokingly said one time. ""hey if you get terminal cancer just think of the party you can have on the way out with all those cards and never have to pay the bill"

I kind of liked that idea. Glad I never had to follow through on it.

40? Holy ****!!

Never heard of anyone with that many. Amazing. Neither of my card companies has made money off of me, with the exception of one stupid cash advance I made. I guess it's just the temptation that is bothering me. Hot date? Put it on the credit card. . . Wanna go snowboarding . . . put it on the credit card . . . oh shit I need my board waxed . . .put it on the credit card . . etc. You get my point. I haven't had any problems yet. I guess it's just the potential for problems that bothers me.

 

[josephadel_3]

I've decided to keep the cards since they have only profited from me once. I payed my bill, and I am starting up that $1,000 emergency fund, and planning on buying some more silver. I took the cards out of my wallet. I'll be using cash only now, and my debit card for online purchases. On a side note: paying cash helps small businesses. When you pay cash at your local coffee shop or restaurant you are actually saving them 2 or 3 dollars depending on the card used. Every transaction made with a visa, mastercard etc. obviously profits visa/MC.

 

[Hoover Dog 1957]

I own two small businesses. Credit card companies charge the merchant around 3 to 3.25% of the total transaction with sales tax included. Using credit card hurts all merchants and pads the profits of the bankers. Hardly any consumer understands that those dollars back and airline miles the credit cards give you back are coming off the backs of the merchants and they in turn charge you higher prices. Only the banks are making money when you use credit cards. It is a total scam of the consumer. If you use cash at my business I give you a discount.

 

[[email protected]]

I've decided to keep the cards since they have only profited from me once. I payed my bill, and I am starting up that $1,000 emergency fund, and planning on buying some more silver. I took the cards out of my wallet. I'll be using cash only now, and my debit card for online purchases. On a side note: paying cash helps small businesses. When you pay cash at your local coffee shop or restaurant you are actually saving them 2 or 3 dollars depending on the card used. Every transaction made with a visa, mastercard etc. obviously profits visa/MC.

Regardless of what you do right now, I still highly recommend you start listening to Dave Ramsey.