Should I Cancel Credit Cards I'm Not Using?
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- čas přidán 29. 08. 2024
- -- David talks about the pros and cons of canceling old credit card you're not using
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#pakmanfinance #creditcards #credit
Something else to be aware of: banks will almost always close the account if there's no purchase activity on a credit card after a given time frame (typically the 2-4 year range)
Here are a few more considerations.
#1 If you’re concerned about unauthorized or inadvertent charges on your account, one option is to keep the account but put a lock on the card or freeze the account so that it can’t be used until you unlock.
#2 Keeping the account open can be a temptation or easy way out for people who have a history of binge spending or poor budget planning skills.
It’s sort of like: Don’t keep multiple bottles of wine in the pantry if you (or someone in your household) are a binge drinker.
Given how it's recently become even more difficult to open new lines I'm keeping every card open and active, even when not needed, as insurance. The last of my annual fees went away last year making that choice easier.
I recently closed my first credit card I ever had. When I got it I had to put down $1,000 in a separate account as collateral. The only way I could get that money back was to close the card.
Surprised David didn't also mention credit age for a reason to keep it open--both in terms of it maybe being your oldest (least useful now) line of credit and dragging up your average length of credit generally when you take on any new credit. I use my oldest card that my mom pushed me to get as soon as I turned 18 like once a year to keep it open since it was basically a decade before reaching a financial situation warranting more than one card.
I was thinking that too.
Some cc also have fees, potentially very high ones (which may still be worth it if you use their features). So if you aren’t using them or their features, you probably want to cancel them.
I literally woke up this morning wondering this exact same thing. Thanks David.
Always use the card once a year, otherwise it could get cancelled by the issuer. There are great online tools you can use to maintain a legacy card (and any card really). You can freeze the card, and then unfreeze it when you want to use it (at least once a year). Other online tools that are great: Get an email every time the card is used. Set up the card so you get a phone call or a text when the card is used for an amount higher than you would normally use: For example if you don't normally make $400 or $500 purchases do it at that level. That way fraudulent use of high amounts will immediately get noticed and won't get ignored in the mass of emails most people get.
Annual fee? Not me! Too much free plastic out there
📌Nice video, love how you take your time to educate your viewers. Right now, I am enjoying a good life and touring round the world with what I made investing. Indeed ,building a Portfolio income(investing) through a licensed investment adviser is one out of many ways to earn passive income.
Do what everybody else is doing if you are okay with only having what everybody else has.Information that will pay you everyday, you've got to stop saving all your money.
Venture into investing some, if you really want financial stability.
Choose to grow and elevate your mind by studying audios, videos, attending conferences that will give you the edge!
@@harrisvangeest5134 Exactly, money is always eager and ready to work for anyone who is ready to employ it. That is why it’s nice to start up an investment now. I have researched about this bitcoin and I found it profitable.
@@lorenzoclemente2831 I have been researching all this while for a digital asset investment and I found bitcoin to be the most profiting of them all , I’m definitely bouncing on the opportunity, thank you so much.
understand the fact that tomorrow isn't promised to anyone, but investing today is a hard thing to do because i have no idea of how and where to invest in these?
@@pucciofabrizio7053 In situations like this,I always recommend to people on getting guidance at least from someone that understands price action and all that while you strive on improving yourself by watching videos and learning fundamental analysis.
I cancelled Discovery and they still charge me purchase interest.
Damn.. David with the "cancel culture" even on the finance channel.
Just kidding. This is good info. Thanks for it. I was debating adding a second Visa card. Still thinking about it.
Very helpful David! We just changed to a different credit card and I wondered about this...thank you
Great video! thank you for taking the time to share!
You should have also mentioned that closing a credit card account could negatively affect your average credit age, which can affect your credit score.
I have 4 credit cards. Three of the cards I always keep a small balance and make monthly payments, by small balance I mean under $50. The 4th card I use for every day purchases. This card was s always paid off by the end of the month. Everyday purchases are my gas, groceries, etc. instead of using my bank card I use the credit card.
You can get an excellent credit score if you use credit to your advantage and don’t misuse it.
Why do you leave a small balance? There's no advantage to your credit rating to be wasting money by paying any amount of interest.
@@tHebUm18 Leaving a low balance will show that you are using your credit but only a small portion. Just random numbers….You have a credit limit of $1000, using 10% of your credit limit is better for your score than using 80% of your limit. It also shows a payment history.
The interest on $50 is very minimal, a couple dollars a month. When I have those cards paid off I will do something like use it to put $20 of gas in my truck. Then I just make the minimum monthly payments. With the main card I use I pay it off before interest is applied
It’s an easy way to greatly improve your credit score
Hey David,
How do un-used credit cards impact credit scores?
Nope!
I’d really like a video on how\when to talk to you kids about finance
If they're old enough to receive an allowance, they're old enough to learn about finance; opening up a bank account; learning savings strategies, etc. Make them also a part (basic level) of the family budget discussions too. That's my opinion at least.
What’s a good credit usage rate. I’m at 7%.
under 30%
I've asked before, I'll ask again...How do I know if my financial advisor is screwing me, or, the market is just bad? I don't know shit about investing or what the hell he does so how do I even begin to know if he's doing the right things with my money. I go over the quarterly and monthly reports with them, and it might as well be in Ancient Greek, Probably by design...Also, I HAVE READ all the Investing for Dummies etc books and I'm STILL kind of clueless as to how it all works. I do know what an ETF is though...
If your own FP can't explain it, it might be time to find one who can.
Basically all financial advisors are screwing you. Most don't achieve returns better than just throwing the money in a market index fund (like one that tracks the S&P 500 either in ETF or mutual fund form) and charge way more for the pleasure. Even those that do beat an index fund, taking out their fees and whatnot will probably still leave you at a net lessor gain.
If you really don't want to know or care, throw your money in one of the target date retirement funds with whatever matches up closest to you turning 65 (or when you expect to retire) and do other things.
Fire your financial advisor, look into David Pakman’s advice and book recommendations, check out Ramit Sethi, on CZcams also is Financial Tortoise which you may like. Their baseline recommendation aligns with the well established, sensible, and no frills successful Bogleheads advice. No get rich quick schemes, no bull crap. Just sound advice and simple structure that you can actually achieve without getting ripped off or lost in jargon.
i dont like to pet a snake.
what is with that mustache pakman lol