Here are two important questions that people who use credit cards should ask:
What's the number of credit cards you have?
Do you need them all?
Many people carry more than one credit card with them every day, but they only use a few of them at a time. Many people don't really need more than two or three credit cards. The rest can be cancelled, and they probably should be.
One of the best reasons to get rid of some of those cards is that it makes you less likely to use them. At the end of the day, you can't add more credit to something you don't have. But before you start cutting up those credit cards you're not using, think about the following.
Make sure that the account on the credit card you want to cancel is empty. This means that the card has no money left on it. If you still owe money on the account, even if it's just a few dollars, pay it all off before you cancel the card.
Silence is golden. If you want to get rid of a card, don't tell anyone. In other words, don't tell the credit card company that you are leaving. This is true if your account has a balance but you plan to pay it off and leave. Some companies may raise your interest rate on that balance if they think you are leaving soon. This doesn't happen all the time, though.
Timing is a big deal. If you plan to apply for a big loan soon, like a mortgage or car loan, you might want to keep your old credit cards (don't use them, just keep them). In some situations, cancelling a credit card can hurt your credit score, which is used when you get a loan for a house, car, boat, etc. If the balance on the old card is $0, you can just put it away until after the next transaction. You can cancel the card once the transaction is done.
When it's time to cancel the card, the first thing you should do is call the creditor. You can sometimes close an account by phone. If not, you have to send it by mail.
If you call to cancel and have been a good customer, don't be surprised if someone tries to talk you out of keeping the account open. In some cases, they might give you a reason to stay with them. This could be a lower rate, a better promotion (like more air miles or phone minutes), or anything else they think you might like. If, for example, the new rate is lower than one of your other cards, you might want to change your mind about cancelling. If the new incentives don't change things much, you can go ahead and cancel.
You should also ask the credit card company to let the credit reporting agencies know that you asked for the account to be closed. Write down the time you called, the day you called, and the person's name you spoke with on the phone. You should get a letter in the mail letting you know that your account has been closed.
If you follow these steps, it will be easy and safe to get rid of your old credit cards. You will be glad you did this work in the future when your monthly bills are lower.
