Debt Consolidation Credit Card to the Rescue (cont.)
Contributed by Victoria Knox
Should you close your other accounts once you have a debt consolidation credit card?
When you have a debt consolidation credit card, it may be a good idea to close your old cards. But that is not always the case. Keep older accounts open. That way, you are not erasing years of good credit history. Doing that can actually hurt your credit score. It's safer to close newer cards that done't have a lot of history.
Also, take a look at your debt compared to your total available credit. Using more than half of the credit available can also damage your credit score. For example, you have three credit cards with a total of $15,000 of credit. The balances on all three of them total $8,000. You get a debt consolidation credit card with an $8,000 limit, so you transfer all of the balances from the older cards. If you close those old accounts you are left with $8,000 of credit, and you are using all of it.
Using 100% of your available credit will also damage your credit score. If you kept the old cards open, you would have $23,000 worth of credit, but you would only be using $8,000 of it. The trick is to keep those accounts open, but don't actually use them. Don't carry those cards with, keep them in safe deposit box, or cut them up and throw them away.
