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When and why to cut up those credit cards

I was shopping at Kohls today and ran into a dilimma. Use my Kohls card, or use my Discover® it™ Card. The dilemma was very short lived, might I add.

I have cards for Macys, Sears, Best Buy, Kohls, Target and Dillards. I can get 10-15% off when I use my Macys card, which really doesn’t matter, when the prices are about 25-50% higher anyways. Sears, Kohls, and Dillards really don’t offer much incentive to use the card, but I do like the Best Buy RewardZone rewards program. All in all, I really don’t see any reason to keep any of these cards except for the Best Buy card.

The credit limits aren’t much either Target $200, Kohls $1500, Dillards $300, Macys $2100, Sears $1300 and Best Buy $3700. Closing these accounts wouldn’t have as much negative effect on my credit report as say a $10,000 or $15,000 card.

It does get overwhelming when you have too many rewards credit cards. I have a Bank of America Cash Rewards Signature card, Discover cards, US Air World MC, Pentagon Federal Platinum Cash and Travel Rewards cards. It is almost getting to be a headache debating between cash, points or miles. The credit limits are pretty decent on the cards, so I will not close them, this will negatively affect my credit score.

Best advice for all you people wondering about if and when you should ever cut up and close your credit card accounts. Short credit history, with small balances are the best bet for doing so with little impact on your credit score. If you have higher credit limits and a longer credit history, keep them open, and maybe charge a tank of gas or a grocery trip on each every quarter to keep them active. If you are not earning any rewards on them, get rid of ’em, all banks are pushing rewards in this day and age.

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