Pricey Liz: Prior to now, you have got really helpful not canceling bank cards as a result of doing so can damage credit score scores. Over time, my husband has signed up for not less than a dozen bank cards, eight of which we by no means use and haven’t used for so long as 10 years. He signed up for one more card just lately as a result of it provided engaging money rewards.
Is having so many bank cards advisable and secure? Does it make us extra susceptible to id theft? With out hurting our credit score scores, might we discontinue the older playing cards we now have stopped utilizing? Is there any disadvantage to having a number of, maybe dozens, of bank cards, particularly if some are older and by no means used?
Reply: The most important draw back to having a bunch of unused bank cards is having to observe all these accounts for fraudulent transactions, and maybe paying pointless annual charges. The unused accounts add to the quantity of accessible credit score you have got, which is a optimistic issue for credit score scores.
For those who’re involved about id theft, your greatest transfer could be to freeze your credit score reviews in any respect three bureaus. Such freezes are actually free, and you may simply “thaw” the freeze quickly if you wish to apply for credit score.
Credit score freezes make it tougher for criminals to open new accounts in your title. If a legal makes use of considered one of your present accounts, you’re usually protected. The overwhelming majority of bank cards provide “zero legal responsibility,” which implies you received’t be held liable for fraudulent fees. Even with out zero legal responsibility, federal legislation limits your legal responsibility to $50.
If monitoring a number of accounts is an excessive amount of trouble, although, then he ought to think about closing among the playing cards. If he’s paying charges for playing cards he’s not utilizing, another choice is to ask the issuer for a “product change” to a card that doesn’t cost charges.
Liz Weston, Licensed Monetary Planner, is a private finance columnist for NerdWallet. Questions could also be despatched to her at 3940 Laurel Canyon, No. 238, Studio Metropolis, CA 91604, or by utilizing the “Contact” type at AskLizWeston.com.
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