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Should I Cancel My Credit Cards Or Cut Them Up?

2010 January 18

One of my New Year’s resolutions was to not use my credit cards.  As a compulsive spender, having access to credit is a huge temptation which could see me breaking my resolution and falling further into debt.  Due to the pernicious behavior of credit card companies jacking up my interest rates for no reason, I’ve already had to cancel all but two of my cards.

I’m thinking now about just canceling them all and blowing them up in a blaze of carnage and destruction befitting the destruction they have brought to my life.  But, I’m hesitant because of the annoying fact that in our country you do need credit - to buy a house, a car, and unless you are a saver, most electronics and other household toys.  A good credit score gives you access to this credit when you need it, and as banks tighten their purse strings, this number is becoming increasingly important.  Here’s where canceling all my cards can have an effect.

As I’ve mentioned before, I have about $37,000 of credit card debt, but my available credit (prior to canceling three cards) was close to $87,000!  If I cancel all my credit cards, my credit report will show that I owe all this money, but I will have no available credit which raises my debt-to-credit ratio to 100%.  This doesn’t look good and could drastically affect my credit score.

As I do more and more research on this topic, I’m finding that most experts agree that you should never cancel a credit card when it has a balance.  Since all of mine have a balance it looks like I’m probably just going to keep them open but find some kind of fun way to annihilate them so I’m not tempted to use them.

Are there any pyrotechnicians out there willing to offer up their services?  What are your suggestions for how I can get out my aggression out on a little piece of plastic?

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7 Responses leave one →
  1. January 18, 2010

    I have always heard the suggestion to freeze them in a bag of water. This way there is a barrier to temptation, but they are still available if you really need them.

  2. Audrey permalink
    January 18, 2010

    Make them into art-you could use a butane (0r propane) torch to work them into various states of melting (and create a taffy-like effect), and then either frame them in shadowboxes (preferred) or set them out and use them as coasters, catch-alls, etc.

  3. January 18, 2010

    Twitter Comment

    New Post from our Personal Finance blogger; RT @ATX4U “Should I Cancel My Credit Cards Or Cut Them Up?” [link to post]

    - Posted using Chat Catcher

  4. Dathan permalink
    January 18, 2010

    Here is a little suggestion. I have heard if you put them in a glass and stick them in the freezer you can’t use them right away and it takes extra effort to dethaw or break the ice. Some poeple will not go to this trouble and just leave them there.
    This is something that I do. Hide them out of sight so you don’t see them so they are not easy to access, like in the bottom of a clothes drawer or out in the garage somewhere. A place that you don’t to go a lot. I wouldn’t cancel them like you said because it does effect your credit. Also you should call the card company’s and ask for a manager to lower your APR because you have been a customer for a certian amount of time or if you get a competing offer in the mail. Tell them you are going to transfer your balance to this new card if they don’t lower the APR. A MAJORITY of the time they will agree to a lower APR saving you hundreds of dollars in interest per year. Just ask Doug some of the things I have done to get the deal I want. It’s all about calling them and asking for a manager to help you out. A lot of people will not do this and the credit cards know it so they keep jacking up the APR rates.
    And the last tip go to your bank and get a Line of Credit loan. Most of the time these APR rates are lower and more managable than the credit card APR’s. That way you pay off the cards and just, helping your credit and build a further relationship with the bank.
    Just my two cents I hope this helps.

  5. January 18, 2010

    Twitter Comment

    Cancel credit cards or death and destruction to them instead? Read my latest post from Republic of Austin to find out [link to post]

    - Posted using Chat Catcher

  6. January 18, 2010

    Twitter Comment

    New Post from our Personal Finance blogger; “Should I Cancel My Credit Cards Or Cut Them Up?” [link to post]

    - Posted using Chat Catcher

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