I would mention one very important caution – make sure no one has access to your credit card number.

I had a friend who cut up her card while she was paying it off but did not cancel it. She made payments for several months and when she finally looked to see what balance was still remaining, she discovered that someone had been using her credit card to make purchases over the phone to the tune of several hundred dollars.

So keep a VERY close eye on your number AND your balance.

I personally feel that everyone needs a credit card if for no other reason than to book a hotel room, rent a car, or buy something on line.

But if at all possible you should have just one and a VISA is more widely accepted than Master Card or Discover, etc. When you have it paid off you can request that your credit line (assuming it was a higher credit amount than you really needed) be lowered to $1,000.00 or $2,500.00 with the best interest rate they have to offer and it should be a card that does not have annual fee if possible and then try to pay the balance each month or if you can’t swing it, spread it over two months. Another way to discourage self from using it, is not to carry it with you. Keep it at home, or at your office, or locked in a safety deposit box and to keep it active use it every other month or so to buy a tank of gas, go out to dinner, or something like that that you would have done anyway.

It is not good to have lots of credit cards that have available open credit because that does hurt your score. Also while you are working at paying the cards off, call the company ask for their absolute best rate that they have to offer. Keep the card active one billing cycle to insure that the lower rate has went into effect, then call the company and ask that the account be closed. This way you can still pay on it but the available credit that was there is no longer held against your credit score as available credit that could be used.

Do this to all of your cards except the one that you are keeping. Make the minimum payment on the cards with the lowest interest rates and lowest credit limits, then any extra money that you might have spread amongst the cards should be applied towards the one with the highest interest rate and highest balance until it is paid off. Then put the extra money towards the one with the next highest interest and balance.

Paying down or paying off credit cards is obviously great; but cancelling them is another matter. When you cancel a credit card, or other account, the “history” becomes closed and is no longer used to calculate your FICO if it was positive; the negative still remains on the credit report however; also; you have then reduced your available credit which means you still have too much “used” credit vs. “unused” credit and this ratio is also an important factor in credit scoring.

I would let them sit providing:

  1. you aren’t paying outrageous fees to have the card open;
  2. if you can hold off from using the cards;

Once you have several accounts paid off; then consider closing the one with the highest annual fees or highest interest rates so it impacts your FICO score the least.