How to Eliminate Card Debt Without Hurting Your Credit

Dear Credit Care,

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Hi! My husband and I are working to pay off our credit cards and get away from credit card debt. We have read that canceling a card hurts your credit score. We are wondering what we should do with each card once we pay it off. Do we cancel it or hold onto it? Our question is: How do we get out of credit card debt without damaging our credit score? 


Dear Andrea,

Congratulations on working to pay off your credit card debt

To avoid unwanted credit card debt, the best solution is an emergency savings cushion of six to 12 months of expenses. Notice I said, expenses, not income. You are, I hope, spending less each month than what you earn. So, if you don't already have an emergency savings account

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Paying down your credit card balances will help to increase your credit scoreFICOVantageScore

For revolving accounts such as credit cards, how much of your credit limit you have used -- known as your debt-to-limit ratio or your utilization ratioimprove your credit score

To get back to your original question, the length of time that you have had credit is another component of your credit score. Length of credit history

I would recommend that you base your decision on closing the credit card accounts on whether you believe having the available credit will tempt you to use it. If you would be tempted, it may be better to receive what could be a slight hit to your credit score than to charge up those cards again. If you do decide to keep the accounts open, be sure to keep tabs on them even after the debt is repaid. This will help you to quickly identify fraudulent use.

Handle your credit with care!

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