Should I Cancel Credit Cards I'm Not Using?

-- David talks about the pros and cons of canceling old credit card you're not using
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#pakmanfinance #creditcards #credit

[negativeproxy]

I recently closed my first credit card I ever had. When I got it I had to put down $1, 000 in a separate account as collateral. The only way I could get that money back was to close the card.

[tk]

Something else to be aware of: banks will almost always close the account if there's no purchase activity on a credit card after a given time frame (typically the 2-4 year range)

[lincolnsghost]

Here are a few more considerations.
#1 If you’re concerned about unauthorized or inadvertent charges on your account, one option is to keep the account but put a lock on the card or freeze the account so that it can’t be used until you unlock.
#2 Keeping the account open can be a temptation or easy way out for people who have a history of binge spending or poor budget planning skills.
It’s sort of like: Don’t keep multiple bottles of wine in the pantry if you (or someone in your household) are a binge drinker.

[Pyrolonn]

Always use the card once a year, otherwise it could get cancelled by the issuer. There are great online tools you can use to maintain a legacy card (and any card really). You can freeze the card, and then unfreeze it when you want to use it (at least once a year). Other online tools that are great: Get an email every time the card is used. Set up the card so you get a phone call or a text when the card is used for an amount higher than you would normally use: For example if you don't normally make $400 or $500 purchases do it at that level. That way fraudulent use of high amounts will immediately get noticed and won't get ignored in the mass of emails most people get.

[TheDOS]

Some cc also have fees, potentially very high ones (which may still be worth it if you use their features). So if you aren’t using them or their features, you probably want to cancel them.

[tHebUm]

Surprised David didn't also mention credit age for a reason to keep it open--both in terms of it maybe being your oldest (least useful now) line of credit and dragging up your average length of credit generally when you take on any new credit. I use my oldest card that my mom pushed me to get as soon as I turned 18 like once a year to keep it open since it was basically a decade before reaching a financial situation warranting more than one card.

[bobbarker]

I literally woke up this morning wondering this exact same thing. Thanks David.

[JemDreamz]

Yesterday, I received this pre-qualified credit card from a company called seen. The most interesting part was the interest rate was 35±% on 1, 000.

The yearly fee was $35-75 and late fee was $35.

[mkraft]

Very helpful David! We just changed to a different credit card and I wondered about this...thank you

[johnswitzer]

Annual fee? Not me! Too much free plastic out there

[DesaiPlasticSurgery]

Great video! thank you for taking the time to share!

[Insightfill]

Damn.. David with the "cancel culture" even on the finance channel.

Just kidding. This is good info. Thanks for it. I was debating adding a second Visa card. Still thinking about it.

[demonprince]

Hey David,
How do un-used credit cards impact credit scores?

[DangerMouse]

You should have also mentioned that closing a credit card account could negatively affect your average credit age, which can affect your credit score.

[dongordito]

Good video and good advice in the comment section!!!!

[smrtzttspanishenglishtutor]

I cancelled Discovery and they still charge me purchase interest.

[BryantPP]

I've asked before, I'll ask again...How do I know if my financial advisor is screwing me, or, the market is just bad? I don't know shit about investing or what the hell he does so how do I even begin to know if he's doing the right things with my money. I go over the quarterly and monthly reports with them, and it might as well be in Ancient Greek, Probably by design...Also, I HAVE READ all the Investing for Dummies etc books and I'm STILL kind of clueless as to how it all works. I do know what an ETF is though...

[Sit_on_it]

I’d really like a video on how\when to talk to you kids about finance

[jasonpowell]

You don’t need credit. A credit score is a scam!!! Pay cash for that $50, 000 truck and do manual underwriting to buy a house…. If you can’t live without “credit” you are not mature enough to

[MikeHart]

I have 4 credit cards. Three of the cards I always keep a small balance and make monthly payments, by small balance I mean under $50. The 4th card I use for every day purchases. This card was s always paid off by the end of the month. Everyday purchases are my gas, groceries, etc. instead of using my bank card I use the credit card.

You can get an excellent credit score if you use credit to your advantage and don’t misuse it.