Choosing Credit Cards to Keep, Cut Up or Cancel
People today usually have way too many credit cards, a fact that is the leading cause of so much debt and the need for consumers to turn to credit repair services for relief. Of course we always want to be on the lookout for credit cards with lower interest rates, but what many people do is ADD to their stack of credit cards instead of REPLACING a higher interest card with a lower interest one. Is there really any need to have 10-15 credit cards? Of course not, but if you watch some people in a store or restaurant it’s easy to see them flipping through dozens of cards including store credit cards.
When people visit credit repair companies and ask, “Can you help me fix my credit?” the typical response is likely to be another question: “What are you willing to sacrifice to accomplish that goal?” When credit repair companies first came into existence it was a routine thing for them to tell new clients to cut up their credit cards. Unfortunately that scenario does not work today for several reasons:
- Credit cards are necessary if you need to rent a car
- Hotels and airlines usually require credit cards for reservations
- Many companies are foregoing paying in advance for business trips and asking employees to cover their own expenses and wait for reimbursement
- Online purchases require a credit card
Of course, the other thing to keep in mind is the credit repair services is used to provide assistance for all debts; today it is usually just credit card debt. They were known then as consumer counseling agencies and helped consumers work through their debts on a monthly payment plan they could afford. While that part of the service hasn’t changed, the type of debts they handle has dramatically changed.
For those who are in financial trouble, the first thing you want to do in order to find out the secret behind “how to fix my credit” is to look in your wallet and see how many credit cards you have. How do you decide which ones to keep and which ones to get rid of? Consider the following:
- What is the interest rate?
- What is the credit line?
- Is there an annual fee?
- Do you travel with your job?
- Do you travel frequently and need to rent a car, book an airplane or book a hotel?
All of the answers will tell you what you to do. For those who travel with their jobs, it is a good idea to set aside one card (probably the one with the highest credit line) to use ONLY for business travel. From there you need only maybe two other cards: MasterCard and Visa. If finances allow you might choose Discover or American Express, but you do NOT need any more than that.
Look at the interest rates and the credit lines: hold on to those with the lowest interest rates and highest credit lines and get rid of the other ones. You must also develop the habit of paying your balance in full each month unless you have a large purchase. Get rid of department store cards; you don’t need them, and they usually have higher interest rates than major credit cards. Choosing your credit cards wisely will allow you to manage your credit and avoid the need to contract with credit repair companies and not having any need for credit restoration in the future.
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