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Roadtodebt's avatar

I have 15 credit cards how can I close them?

Asked by Roadtodebt (471points) June 18th, 2017 from iPhone

I’m recently divorced and have 15 credit cards and it’s just becoming overwelming and I don’t know how to handle it, I want to close most of them and keep maybe 5 or 6. What’s the best way to do this without destroying my credit? And can I request to close an account before I pay it off to get some sort of payment plan?

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36 Answers

Tropical_Willie's avatar

No you can’t get a payment plan other the monthly payments, cut them up or don’t use them.

Closing an account will not help your credit score and may hurt it.

Go to consumercredit.com , they are free and will get you on the road to better credit.

Roadtodebt's avatar

I’m still fairly young and would like to purchase a home by myself in the future, I know too many credit cards looks very bad

chyna's avatar

You could get one “no interest for a year” card and transfer the balances to that card and pay that one off as quick as you can.
Six credit cards are still too much. Cut that number down to three. A major credit card, maybe a gas card and maybe a large department store card that you frequent to get access to their discounts and coupons. Don’t charge more than you can pay off each month.
Don’t close the accounts, but don’t use them. Make sure all the companies have been notified that your ex spouse is no longer allowed to charge on those cards.
Good luck and welcome to Fluther!

Roadtodebt's avatar

Maybe I should add more detail, sorry! I’m new. Well I am a single mother of 2 recently divorced, all my cards but 2 are maxed out and I am in about $7000 of debt to credit cards alone, I cannot afford to even make the minimum on all of them at the moment.

Tropical_Willie's avatar

@Roadtodebt go to a Credit Counselor like consumercredit.com they are there to help, they will give you “form letters” to send to the card a companies.

P.S. they are backed by credit card companies because they don’t want you to declare bankruptcy.

elbanditoroso's avatar

There is no reason to close any of them.

If you only want 5 of them active, then you should take a scissors and cut up all the others. Don’t use them, but leave them on your credit report.

One of the things the report does is calculate credit used divided by total credit available. If you close the accounts, your denominator is smaller and it looks like you are using more credit, which hurts your credit score. Whereas if you leave them open but unused, the percentage of credit used is smaller, and your credit score goes higher.

If I were you, choose the 4–5 best and cut up (but don’t close) all the others. If you ever need them again, then call the credit card company and tell them you need a replacement.

CWOTUS's avatar

The first thing to ensure, though, even before all of the other good advice above, is to make sure that your ex no longer has access to your credit.

To ensure that, unless it was already a verified part of the divorce, is to call and write (by certified mail) to all of the cards’ service desks and request that they acknowledge that you are divorced and that your ex should no longer be on the accounts. They may elect to close the old accounts themselves and reissue new cards to you for a new account in ‘your name only’. As others have already noted, do not “close” the accounts; just verify receipt of the cards, then cut them up and do not use them. (If you ever do need to have access to them again, simply call and report a ‘lost card’ and another new one will be sent to you – and another replacement account.)

AshlynM's avatar

I would just contact the banks you got them from and ask what the best approach is.

JLeslie's avatar

See if you can transfer the balance of a few of them into the card that has the lowest interest rate. Then, the ones you have zeroed out close them up. You have to be as frugal as possible and pay them off as quickly as possible (I realize it might take you several months or a few years) because the interest rates cost you a fortune in money. Every month you are paying hundreds of extra dollars, so the faster you pay it off the more money you have in the end still in your pocket.

If you think you can make a little extra money working a few hours for a temporary stint. You may already work 50 hours a week, so then of course forget what I said about that. Good times to get extra work are Christmas season (lasts about 6 weeks, usually retail, but if you are terrible at resisting temptation don’t do it) or maybe you have some sort of side thing you can do.

If your parents can pay off the credit cards (if they have a good financial situation) ask them for the money, write up an IOU to them with how much you will pay them every month to pay off the loan, and pay them. This way no interest. Even if they just help you pay off a few cards everything counts.

If you have multiple cards and you miss payments you’ll have interest plus penalties. Condensing into fewer cards at least you will have fewer penalties to deal with if you have a very tight month.

Your credit score might go down a little initially when you cancel cards, but it doesn’t matter.

Ideas for cutting back: no luxuries like manicures. Don’t buy coffee out. Don’t drink alcohol (if you must, then don’t drink at restaurants and bars where it’s crazy expensive). Consider having a friend cut your hair if you have a simple cut, or go to an inexpensive salon. Dye your hair at home if you dye it. No shopping for clothing or shoes for 6 months. Don’t buy anyone Christmas gifts until you have your own financial stability. You can make something if you must. You may already be incredibly frugal. I’m not assuming anything

seawulf575's avatar

Some of it depends on your current financial situation. If you can afford to pay them off it takes lots of discipline. Make min payments on all except the one with the smallest balance. Pay extra principal every month on that one until it is paid off. Then sink the min payment and extra principal that you were paying on that one and add it to the min payment of the card with the next smallest balance. Continue doing that until you pay everything off.
If it is just too much and you are completely overwhelmed, you have two options and neither will spare your credit rating. The first is to go to a consumer credit counseling service. There are a number out there. I once used the one offered by the Catholic Church. They will contact all your creditors and arrange to lower and/or zero the interest you are paying and will roll all your payments into one which is generally much smaller than what you are paying now with minimum payments. Usually you have to hand over all your credit cards while they have control of your payments, so you cannot use them at all. It’s a lifestyle change, but is doable. The credit counselors are good if you are overwhelmed but not desperate. If you are desperate, you have an option for bankruptcy. Bankruptcy is a legal action in which you retain a lawyer who then files the paperwork. The courts then contact all your creditors and tell them your plan to default on the debts. They have an option to contest your action but most don’t waste the time. Once the bankruptcy goes through you are pretty much debt free and you get to start all over again. Yes your credit takes a beating, but when I did this I then got a car loan at a ridiculous interest rate and paid it off over time, never making a late payment and not paying it off super early. It’s amazing how quickly your credit can recover. One catch on bankruptcy since you are going through/went through a divorce: your ex is included in on the list of creditors. All the CC companies will go after her when you are no longer a viable option for them. She, too, can contest things which then can become ugly.
All in all, that is about it. I know of all of these because I went through the exact thing you are going through. Got divorced an had a ton of debt I couldn’t pay off. I tried all of these methods at one point or another. Yes, my credit too a beating, but after a couple years it was recovering. by the time I paid off the high interest car loan I was back to a high 600/low 700 credit rating. Good luck, my friend.

JLeslie's avatar

I just want to make sure I point out that you don’t have to close an account to stop using it. I still stay with my advice to transfer the balances of the cards with the highest interest to a lower interest card.

Also, I would be wary of paying anyone to help me sort through it. I don’t know how that works, but it seems like you are just adding an expense.

Roadtodebt's avatar

Thanks a lot for all of your advice!

LuckyGuy's avatar

Great advice above. But I have one more. Make sure there are no monthly fees on any of the cards you are keeping. You don’t want to be paying a monthly service charge for a card you cut up or put in a drawer.

MollyMcGuire's avatar

You can’t close an account with a balance. I really want to ask how the hell you ended up with 15 of those evil cards but, alas, you placed your inquiry in the general section. Move all of your credit to one card….the one with the best terms, and pay it off as quickly as possible…...And I mean eat rice and beans and sell the car if you must. Get out of debt!! Keep one credit card buried deep in your wallet for the occasional emergency. If you have to live like a pauper for a while it is worth it to live a debt-free life…...peace of mind is a big part of the happiness equation.

Dutchess_III's avatar

Have you considered working on a cash or check-only basis, and not using credit cards? Debit cards act like credit cards but they’re more like checks. They’ll be declined if the money isn’t in your account.

Pachy's avatar

I found myself in the same stressful situation in the early 2000s and signed up with a credit management (NOT debt consolidation) company. It took 3 years to pay off all my cards but I’ve been debt free since and am eternally grateful to to the company, CCCS.

JLeslie's avatar

Regarding debit cards, just keep in mind debit cards do not help your credit at all. They are just like cash. If someone uses your debit card I don’t know if there is any remedy, credit cards have protection. Just something to check, maybe now debit cards have some protection. I’m not very savvy on debit cards, the only one I have is my HSA card, because there is no other choice with that type of health account.

Pachy's avatar

@Roadtodebt, my debt experience taught me that one deeply in debt can’t dig out alone. Trust me on this. I urge you to see professional help. I feel your pain.

Roadtodebt's avatar

@Pachy thank you! What’s the different between management and cosulidation?

Roadtodebt's avatar

Would all the account be closed if I chose debt management?

Tropical_Willie's avatar

The cards are not closed in management. Consolidation is an new LOAN that you pay to a Company that pays off your old credit cards. They charge you an additional fee each month, go with CCCS .

Dutchess_III's avatar

@Roadtodebt Just call the credit card companies and tell them to close the accounts. You’ll still have to pay off the balances due, of course, but you just won’t be able to use them for new purchases. Same thing if you just cut them up and trash them.

JLeslie's avatar

@Pachy I found your answer very interesting. I always have thought better to deal with it on your own, but you have caused me to rethink it.

Tropical_Willie's avatar

@Dutchess_III Closing the cards TRASHES the credit rating for the for the foreseeable future !

JLeslie's avatar

^^Having the cards charged to the max and not paying on time trashes the credit rating also. Having lots of open credit helps the score. You can achieve that with a few cards and higher limits. There’s a point when so many cards is hard to keep track of. If any of the cards have an annual fee the OP definitely should work on getting rid of those, unless there is a really good benefit like flying for free or hotels for free that the OP actually uses. It’s true closing the card causes a negative on the credit, but it goes away fast, and can be compensated for by paying everything off.

My husband’s credit is over 800 whether we have a mortgage or not. We usually have one car lease, and he has 3 or 4 credit cards like visa and MasterCard, and I think two department store cards??? Maybe they don’t count because I think the main name is mine on the store cards. My credit is usually in the high 700’s. I have more crap on my credit because of medical bills probably.

Roadtodebt's avatar

I’m going to try calling cccs today and see if they can even help me, I haven’t been able to make the minimum on 3 or 4 for about 2 months now so I’m not sure.

Tropical_Willie's avatar

@Roadtodebt get back to us once you talk to CCCS.

Dutchess_III's avatar

@Tropical_Willie If you’re current on your payments (and I know the OP is not,) and you continue to make the payments on time, why would closing the cards trash your credit?

Tropical_Willie's avatar

You have a credit limit for each card. The credit rating companies add those limits together for part of you score. If you have only two cards but the limit is $50,000 on each the total is $100,000. If you have 10 cards with $4,000 on each that is $40,000. If you close out 8 cards you only have $8,000 total.

Roadtodebt's avatar

Well I called they set up to close 8 of my accounts at $148 a month for 2 years. I’m very excited (:

Dutchess_III's avatar

So you only pay $148 a month total for all 8 cards?

Roadtodebt's avatar

For the next 2 years

Dutchess_III's avatar

That’s great! Now cut them up and throw them away and do not get another one. If you don’t have the money to buy something, chances are you don’t really need it.

Roadtodebt's avatar

Thank you for your help everyone !!!

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