Real talk! 31 credit cards, 24k in debt

[Anonymous]

Between my husband and I we have amassed 31 credit cards & 24k in debt. There’s a mix of good and bad lenders and 11 of the 31 are low limit store cards.

Nearly all are 90% of limit. No lates ever.

We have successfully gone on a spending freeze for 60 days, so we now have a chunk of money saved. We expect 4k in tax return. And then an additional 1k a month that we were spending but now save.

With all of that said, we have the ability to pay off all 31 cards by Sept/Oct and still keep some savings. Clearly we have a problem with responsible credit use, and that problem is me. Although I’m doing better as of late...

So finally the question. Can I close every card as I pay them off so I stop running them up every time I pay them off? Are there some cards we should keep? A magic number for credit health? We sold our house last year and plan to buy next year so I don’t want to damage our ratings too bad by closing cards. Most of the cards are younger than 4 years. I’ll * the ones that are 5+.


In order of age, top of list being cards had longest, here’s what we’ve got.


US Bank*
5 Capitol One (3 in my name, 2 in his)*
Amex
Milestone
Chase (He has 2)
3 Barclays (2 in my name, 1 in his)
3 Credit One (2 in my name, 1 in his)
2 Merrick (1 each)
LendUp
Bank of America
2 Walmart
2 Kohls
2 Amazon
JcPenney
Lowes
Old Navy
Maurices (Capitol One)
CarCare (From the dealership, for tires, etc.)

Advice?

[Kree]

Congratulations on recognizing that if you keep the cards you will just end up in debt again. However have you considered keeping them in a sock drawer or a safe instead? If it isn't in your wallet you can't spend it without meditated thought. Another idea people have is to put the card in a bad filled with water and freeze it.  You can still get to the card in an emergency, but it will take 6-12 hours  to thaw out first.

If you are set on closing cards I suggest closing the youngest accounts first. Ten years from now, when cards start dropping off of your report your credit could drop.  Keeping the oldest cards will help mitigate that.

5 cards is probably the best number to keep. However if you are buying a house next year, I would not suggest rocking the boat. Try to see if there is a way to keep the cards without using them.

[Anonymous]

Okay, sounds easy enough. Would cutting them up do the same thing? Still wouldn’t physically have them? Especially the store cards because there isn’t really a need to even freeze those for a just in case?

[Kree]

cutting them up would be the same. You can always order a replacement card to be shipped to you in 3-5 business days. A second thought I had, with 31 cards you might be able to lose a couple with no longer term effects. Consider any card  that has a Annual Fee but no benefit to closable. No need to pay $59 or $95 a year if you aren't going to use the card.

Also, you might find that over time the cards will close on their own. Sometimes unused cards are closed by the creditor when unused.  We suggest the sockdrawer because you can buy a stick of gum once every 3 months.  But with 30 cards even if a couple close down over the next few years you should be fine long term, credit wise.

[Anonymous]

One small thing you can do is you can also look into combining your Capital One cards. I combined 2 of my capital one cards into 1.  It basically took the limits and combined them into the card I chose to keep (quicksilver) and closed the other.

[Anonymous]

Good to know! I have 3 Cap 1. 4 if you count Maurices.

[nmk94]

I used to have great credit. Part of the reason was because I sock drawered or cut up all of my cards. It's how I got out of debt.

Then my income declined, and I started to use the cards again. "Only to hold me over" I said. But of course, once you get used to using those cards, they develop a power of their own. It's like the card has it's own mind, and you're just the person taking it shopping. You lose control. That's how I got back into debt, that's how my score was shot, that's why I'm now rebuilding.

In your case, I'd cut up all but a few cards, those you might need in case of an emergency. Then either sock drawer them, or freeze them. Not being able to use them is the only way to definitely not use them.

[Anonymous]

Pick one or two cards that you need to keep around

Probably your highest limit card (for emergency like a deductible on a collision), and a cash back rewards card like a quicksilver

the rest can all go into a box (a safe or lockbox or if you really want a barrier, a safe deposit box at the bank, and yes im serious)

Pay em off.  Then after all are paid off, look at what you really need and get rid of anything with a limit under 500, or that only has a value once in a while.

less is more, i went through this myself (not the heavy debt part) but i went from 21 active cards to 7, even though 18 of them are still technically open, I have no direct easy access to those lines and they are only open so long as the creditor doesnt care they are running zero balance

they served their purpose, and now im in a position to consolidate, as you are.  (i have nine cards in my sig, but one hasnt arrived and one i just activated today, so they havent reported, so i am still technically at seven)