 Weeding
out the credit card crop
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 Dear
Dr. Don,
Over the years, I have accumulated about 20 credit cards. I only
use three or four and usually pay off the balance each month. Will
it hurt to get another card (someone is offering zero percent on
balance transfers for life)? Should I cancel the cards that I don't
use? Thank you.
-- Ron Rejigger
 Dear
Ron,
It's time to weed the garden of plastic in your wallet. Closing
accounts isn't recommended as a short-term strategy to raise your
credit score, but it does help to free up some credit capacity and
can be a smart long-term approach to managing your credit.
Good payment histories are kept in your credit report indefinitely,
while negative information only stays on your credit report for
seven years. Since length of credit history is a component part
of your credit score, you don't want to close all the old accounts.
Pull your credit report(s) to review the age and payment history
on the accounts. Bankrate has the contact
information to get your free credit reports.
Then look at the annual fees, interest rates and usefulness of
the credit cards to see which cards deserve a space in your wallet.
You're using three or four cards now. What is it about those cards
that makes them the ones you pull out of your wallet when you're
making a purchase? Decide on several cards that complement these
cards, and prune the rest. The Bankrate feature, "How
to close a credit card account," explains the right way
to close an account.
If you're not carrying balances, I don't see how you would use
a balance transfer promotion at zero percent to save money. Are
you going to run up balances over a few months and then get the
credit card, or are you planning to make a big purchase and then
do a balance transfer? Read the fine print on the cardholder agreement
carefully to understand the costs and expense of that "zero
percent" card along with what triggers could cause that rate
to change. The Bankrate feature, "Take
care with your zero-percent credit card," has more on zero-percent
offers.
To ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "financing
a home," "saving & investing" or "money."
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