Use them responsibly, that is. If you need to put them away in order to get them, do so. If you don’t have them completely under control, follow Miriam’s advice until you do.
If you’re going to put them away, it’s not necessarily a good thing to cancel them. Never cancel them when you’re in arrears! That will ding your credit score very quickly. Try to keep them open until they’re paid off. If you can trust yourself not to use them and they don’t have an annual fee, you’re better off keeping the accounts. When you close them, it’s a hit to your score. How much of a hit depends upon your balance and payment history.
Credit cards can be a very good thing, if you’re disciplined. That’s a big “if”. Most people need to have at least one card for online transactions (which can be less expensive), rentals, and security deposits.
Interest rates are currently hovering around 15% for most cards. You wouldn’t take out a loan at 15%; don’t use a credit card at that rate. If your credit isn’t great, you’ll have to pay that. But if you have good credit, have transferred your debt over to a fixed rate card, and are just looking around for a card for everyday use, here are my top picks:
Though Bank of America gets a low rating from me for customer service, their World MasterCard is probably the best bet for low interest rates. Right now, it’s 7.9% with a 12-month 0% introductory rate. You’ll accrue reward points as well. Terms here.
If you have a small business, the Advanta Platinum Business Rewards card. Same 7.9% as the B of A card above, but a rebate program for purchases of technology, utilities, office supplies, and more.
Note: Some people play the 0% game, and do so very well. If you are completely on top of your finances, you can simply open up a new credit card every six months at 0% introductory rate. I don’t trust myself quite that much yet, and while most of my cards have a zero balance, not all do.
Related Blogs:
Five Tips to Help You Stop Using the Credit Cards
Credit Cards: The Best Ones for Balance Transfer