Source: National Cyber Security – Produced By Gregory Evans
Q. I have several credit cards that I never use, and they have no annual fee. Should I cancel them so I don’t have to worry about ID theft? A. Identity theft probably shouldn’t be as big a concern as what the cancellations could do to your credit score. For starters, those credit cards may contribute to your credit scores, and canceling them may mean your scores drop, said Gerri Detweiler, director of consumer education for Credit.com. That’s because a significant factor in your credit scores is your debt usage ratio. “This ratio compares your available credit limits to your balances, both on individual accounts as well as in the aggregate,” Detweiler said. “Consumers with the highest credit scores tend to use less than 10% of their available credit, though it is still possible to have strong scores and use 20 to 25% of your available credit.” When you close accounts, the credit limits of the cards you close are no longer part of this calculation. If you have plenty of other available credit, and closing these accounts won’t significantly affect this ratio, then you don’t have to worry about it, Detweiler said. But if closing these will push up […]
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