Is it better to just cut up a credit card or cut it up and cancel it and why?

Answer 1

This depends on a few factors:
1. Having access to more money via credit (i.e. your credit limits on your cards) increases your credit score, to a point. Once you start getting ridiculous numbers of credit cards, it no longer helps to keep them open.
2. Having accounts for a longer period of time increases your credit score, i.e. keep the oldest accounts open for a higher score.
3. Your credit score also depends on the balance on those cards and how long you have had the account.

So, from a credit score standpoint, unless you have a ridiculous number of cards, you should keep the accounts open.

ON THE OTHER HAND:
If you have trouble keeping yourself out of debt, forget your credit score and cut up the cards. The psychological benefit is great. If you keep them open, you always run the risk of being able to rack up debt again. For this reason, it is far better to close the accounts. I would suggest ONE card with a low limit, just for emergencies.

In addition, you need to keep track of all the accounts you have open, whichever course you choose to take.

Answer 2

It depends on your personal situation.
From a credit standpoint, canceling a credit card makes your debt ratio go up (i.e. the less money you have available for the borrowing v/s how much you owe).
If you have a long history with that card, closing it will lower your score. If you've only had it for a little while, the impact will not be that great.
Cutting up a card and throwing it away but keeping the account open will do nothing for your score. You have to actively use the credit in order for your score to go up or down.
So, again, it depends on what you are trying to achieve.

Answer 3

Canceling a credit card lowers your amount of available credit. That is bad. But if you own too many credit cards, that is a risk also. The best thing to do is to have 2 or 3 major credit cards and just use those.

Answer 4

If you believe that you will use the account if you can do so without the card, then cancel the account. The credit card company will continue to send you monthly statements as long as there is a balance due.

If there is no balance due, and you don't want to use the card, just cut it up. Having the account, does not hurt if there is no annual fee.

Answer 5

Unless you have a ton of credit cards with very high limits, do not cancel it. Part of what is looked at with credit is how much you owe compared to your total available credit.

If you have 3 cards with a total balance of $500 and a total available limit of $2000 (1/4) it will look better to have the 3 cards then to have 2 cards with a total balance of $500 and an available total limit of only $1000 (1/2)

Answer 6

you can cut it up all you want but it'll still be there in the system. of course you have to call & cancel it. it's not like the card has some kind of chip in it that alerts the bank that it's cut up. what a crazy question.

Answer 7

You will want to cancel it and then cut it up. If you dont cancle the account it will remain open and active, not a good thing if you want to improve your credit.

Answer 8

I just ! saw this Friday night on 20/20 or one of thoes news tv shows it's best to cut it up if you cancel it it will lower your credit score

Answer 9

Well you need to def. cancel it b/c you will still be sent stuff. You need to cut it up so no one else can find it or use it.

Answer 10

you should always cancel it because if anyone is able to piece it back together and get the info they can still make purchases online.