Q. I have seven credit cards, but I actually only use one. I know that canceling cards can affect your credit score. What should I do with the cards, and if I need to cancel, how do I decide which ones? They all basically have the same interest rate, but I don’t keep the balances anyway.
A. We are happy that you are careful about your credit.
There is no hard and fast rule about the best number of credit cards.
If you handle all the payments and feel like you do, here’s what you should consider before deleting any of them.
If you want to close one or two cards, you need to consider the length of the credit history, the card’s payment history, and the credit limit, said Debra Ohstrom, Chartered Financial Analyst and Financial Educator. .
If it’s an old card and you’ve used it in the past, but you don’t use it anymore, you don’t want to lose that reliable payment and your long credit history. she declared.
“At least 30% of your credit score takes into account a reliable payment history, so that’s very important,” she said. “Creditors like to see a reliable payment history and the longer the better, showing that you are responsible and stable. “
The other thing to consider is the credit limit.
Ohstrom said that even if you don’t use the card, if it has a high limit, it’s good for your score.
“Having a lot of credit available and not actually using it means you have low credit usage, which is a big part of your credit score,” she said. “If you can keep your credit usage below 30%, that’s ideal. “
If you cancel a lot of cards, you’ll lose history and your available credit will go down, which will likely lower your credit rating, she said.
Having three cards is definitely a good thing and five isn’t a problem, especially if you’re not overdoing it, she said.
“It would also be helpful to look at your recent credit report and see if there are any comments regarding your score,” Ohstrom said. “If your credit report contains comments on large amounts of revolving credit or your payment history, this can help you make a decision about the best course of action for you. “
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Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.com‘s weekly electronic newsletter.