Close Those Credit Cards Before You Hit The Mall

The average American, and world citizen is in debt. This is a scary fact that does not appear to be getting any better especially as the economy takes a nose dive. Thankfully, there are a few tips and tricks we can all practice to save money and make the crunch hurt a little less. These tips and tricks can be small like turning off the lights when you leave the room, to larger ones like closing out those credit cards.

For many, a credit card is as good as cash. This thinking is how many people get into trouble in the first place. We must remember that a credit card is not cash but an IOU slip with interest rates, fees, and penalties. Whatever you spend has to be paid back no matter what you buy. The credit card companies are careful not to advertise this fact and can we really blame them? This is their business, after all. Of course, their business is our debt and financial ruin so it pays to be at least a little savvy when it comes to credit cards.

The idea of closing credit card accounts can be frightening but it can also be the savior for many. There are many reasons people choose to close their credit cards among them include:

• An Old Card
• A Small Credit Limit
• A High Interest Rate
• You Just Need Something Better
• You Can Get Something Better
• Debt, Debt, Debt

Whatever the reason you have for getting rid of your cards saying no thank you to charging it is hard but completely possible. Not all credit cards should be closed, an important fact to keep in mind. If the card has a remaining balance then you will want to pay it off before you close it down. This way it doesn’t appear that the card was maxed out and closed by the company. Now, if you are able to spend responsibly you should keep a card with good rates and low interest rates as a “Just In Case” measure. This card should be used in times of emergencies like doctor visits, car repairs, and other similar instances.

You can not simply call the credit card company and ask for the account to be closed. You must send them a request in writing. If you do not do this then you are still liable for the monthly payments. Keep in mind that when you do close an account, if you should ever choose to reopen it you will be subjected to the current interest rate and unable to receive the rate you had when you first opened the account. If you do not want to risk this scenario and reopening the account is likely then you should keep the card active.

If you want to close a card whose interest rate is too high then you should call the company to see if you can negotiate for better terms. If you are current on your payment with a good history then you have a pretty good chance of receiving a lower rate. Besides, it never hurts to ask.

Credit cards can be an ally or your enemy when it comes to your credit rating. Many will find the responsibility of juggling multiple cards too confusing or frustrating and feel the need to close out a few accounts. Whatever your reason for choosing to discontinue a credit card, or two, or a baker’s dozen make sure to pay the remaining balance in full and send a written request. Always use your credit card responsibly and remember, it isn’t cash and you will have to pay it back sooner or later.

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