Canceling my credit cards - Getting a house?

[ashber]

I wrote this on another board but I have some mortgage questions at the end: Okay, I have been paying off my debt, and will be done in less than a year. I have a total of 12 credit cards =O with a mix of charge and credit cards. Okay, so I want to cancel all my cards once my debt is all paid off. But, I know I can't because in a couple years I am getting married and we will be buying a house. I know we are suppose to keep the oldest, but the oldest 3 are from retail stores, and the closest bank visa card is 8 months after that. Should I close those retail accounts? I really just want to pay all cash for everything, but I want something for emergencies, or if I need to book a hotel or rent a car. Is it okay to just have one card, or is it recommended to have 2-3 cards?

* Do I need to have credit cards to get a mortgage loan? It will be my fiance and I, and he has been building his credit too. We both have the same length of credit, and started in the beginning of 2007. Can I cancel all of my cards and he just have his? Would that be good enough for the bank to loan us money? What is the best route when thinking of getting a mortgage loan, and how to handle my credit?

[Anonymous]

It is my understanding that you will be expected to atleast have 3 positive tradelines.  You should have atleast 1 major credit card and 1 store card for better FICO scoring. If you already have the others, just keep them. Why cancel them?  You don't ever have to pay a dime of interest. You can make your credit cards work for you. For example, I use my Chase Freedom Plus card as my debit card, but 2-4 times a month I make payments in full. By the end of the billing period I stop using it about 4 days before my statement cuts, make one final payment at the end and my bill reports a 0 balance, but I still wracked up the cash rewars. Next month I'll get my 3rd check for $250. That means that since I got the card in June 08, I will have made $750 cash back in less than 10 months.

If you are looking to buy a house, nows the time to buckle down and learn to have willpower. Don't be a slave to credit cards, don't be scared of them. Don't use them when you know you shouldn't and just let them work for you when you have the money to pay immediately. Even if you make a purchase and then use the online account to pay immediately. I have done that before too!  Or some banks have local branches and you can pay on your card with cash even before the item posts to your card balance. You can make it work, just be strong and willpowered. You'll need to learn to do that anyway once you have a home you are responsible for. Best to start now!

[Anonymous]

The only credit cards you should consider cancelling are the ones which you are charged an annual fee regardless of whether you use the card or not.  If that is the case, you need to decide if cancelling the card is worth the negative impacts down the line such as effects on your average age of accounts and debt to limit ratios.