Once your cards are paid off, it can be tempting to start charging again. But that’s the worst possible thing you could do. There is some disagreement as to the best course of action. Here are the things you could do, along with their pros and cons.
* Keep your cards and don’t use them. Some experts recommend that you keep accounts open in order to improve your credit rating. This can help, but if you’re not using the cards it won’t help much. And by keeping the cards, you open up the door for temptation.
If you have accounts that you are not using you will probably not be reviewing them every month. This is a perfect situation for a person who wants to steal your identity. They could do a lot of damage before you ever notice.
* Keep your cards and use them occasionally. This will build up your credit rating, as long as you pay the balances in full each month. But still, by keeping the cards you could be tempted to run up the balances again, putting yourself right back where you started.
*A less tempting option is to hold onto only your lowest rate credit card and close all the other ones out. This gives you something to fall back on in an emergency situation but you have all those other accounts tempting you to buy.
But even when you only have access to one credit card, it’s possible to get into more debt than you can handle. If you’re offered a credit limit increase, turn it down.
* Close all of your accounts and don’t look back. The only sure way to stay out of credit card debt is to not have access to any credit cards. If you are concerned that you might not be able to help yourself, this may be the best thing.
The latter should be a last resort because credit cards are helpful in building good credit. They can help improve your financial situation by helping you obtain low interest rate loans when you need them.
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