smart spending

7 steps to clean up financial clutter

Get rid of credit cards
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Closing credit accounts can hurt your credit score. But your score shouldn't be the only consideration in whether to close accounts you don't need. Use a few major credit cards responsibly and close other accounts to free yourself from paperwork, advertising catalogs, identity-theft risk and the temptation to overspend.

To clean up the clutter:

  • Make a list of your credit cards in order of the highest to lowest interest rate.
  • Transfer balances from the highest rates to the lowest.
  • Close the high-rate accounts.
  • Make more-than-minimum payments on the low-rate accounts.
  • Monitor the rates until the balances are paid off.

Don't be deterred by the stumbling blocks and special offers that credit card companies use to prevent account closures. Instead, "hold on, be persistent, ask for written confirmation that the account has been closed and then follow up and look for the closed account on your credit report," Ciccotello says. Repeat this line -- offered by Rogoszinski -- as many times as necessary to get the result you want: "Thank you, but I need to close this account."




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