Getting out of debt is at the top of a lot of people’s New Year’s resolutions list and getting rid of credit card debt is usually the best way to get started. Unfortunately, if you’re anything like me, access to easy credit is also the hardest thing to kick. Whenever my credit card balances start to climb again, I threaten to cut my cards for good, but then I just end up moving it out of my wallet into the back of a drawer.
Access to credit for use in emergencies and for short-term loans can be very handy and the good credit history I’m building (as long as I can make the payments on time) can be good in the long-term. But over time the balances usually start to grow and the cycle begins again.
So what do you think? Cut the cards for good, or keep holding on to them?
While there is nothing inherently wrong with cutting your cards – in fact it can be empowering – it’s important to be careful about which cards you actually close. If you have used a card for a while and you had good history paying on the card, by closing it you say good-bye to that credit history, which may affect your credit score.
On a side note, I have the cards I don’t use in a cup of ice water in the freezer – keeps me away from the ice cream too!