When to Cancel Credit Cards
When it comes to credit cards, it's not unusual for one person to have several of them. If you're the type of person who has several credits cards, you may also have a lot of debt. People who have a lot of debt often struggle to make their payments to creditors every month. If you find yourself in this situation, then you may want to consider the prospect of cancelling some of your credit cards. Many people wonder when the time is right for this, and much like determining when to retire, the answer is different for every person.
Many people never take the time to cancel their credit cards, even if they don't use them anymore. Most of the time they will just sit in a wallet collecting dust. Rather than just leave your credit cards lying around, you should pause to consider whether or not you should cancel them. It's often easy to do, and it may actually be the right course of action for you. Spend some time thinking about the credit cards you have now and decide whether or not they are something that you'd like to keep or whether you'd be better off if you cancelled them. If you're not using them, then the time to cancel is now.
Reasons to Cancel
There are a good number of reasons why a person may want to cancel a credit card, and one of the most popular ones is having too much debt. With credit cards it's really easy to spend a lot of money without even realizing it. You can just keep sliding the card as your balance goes up and up. If you find that you are in this situation, then it may be time for you to put a stop to it. Cancelling your credit cards will limit your access to these types of funds, and it could help improve your situation.
Another common reason why people choose to cancel credit cards is because they simply do not use them. If you have more than a few credit cards in your wallet and you don't use some of them, then there will be no point in you keeping them. Actually, doing so may cost you money and it may be a security risk. Some cards have annual fees associated with them, and you could be paying this even if you are not using the card. Also, keeping unused credit cards active puts you at a greater risk if your cards are stolen.
Things to Consider Before Cancelling
While the aforementioned reasons are a really great reason to cancel credit cards as soon as possible, this is not always the best move. You should remember that your credit score is going to be based partly on how you use credit cards and not having any could really do some damage to your finances. If you want to have a way to boost your credit score, then you may want to keep the cards, use them, and make sure that you pay on them.
If you are thinking about when to cancel credit cards, you should stop to consider that you will have to pay off your balances. When you cancel a credit card, the balance on the card is going to become due. If you don't have enough money to pay off the balance, then this could put you in a bad situation that will end up affecting your credit score in a very negative way. Before you cancel, make sure that you have enough to pay them off.
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State Guides to Credit Card Laws
- North Carolina
- West Virginia