Credit Accounts and Your Credit Report

Edwards Finance > Credit Report

Q. as you may or may not know from my various posts in this newsgroup, I'm well on my way to becoming debt free. Now, by this time next year - August 2003 - I will be 100% debt free; i.e., no ccard debt, no student loan, and no car debt. Right now that is my only goal in life. Now, I've read a lot of information saying I should close all but one credit card account. Reasons range from removing the temptation, all the way to "because too many credit cards looks bad in your credit report." I've also heard that too *few* credit cards can look bad in your credit report. Is this true? Or is it simply a rumor created by credit card companies? All told, I will have 4 credit cards, 2 department store cards, and 1 revolving line of credit (credit card w/out the "card") - all with $0 balances. Will this look good or bad on my credit report? I recently looked at my credit report and I have no negative items on it.

A. The best question is what credit do you need. If you need this credit, and use some of it in a responsible manner, then I see nothing wrong with it. On the other hand, someone who make $10K per year, and has $200K in credit limits, that would be out of whack. In my case, I frequently travel on business, and can accumulate $20K in business expenses at a time. If the expense check is slow in coming (or I am slow to put in the expense report), I might have to take another trip like this before getting paid. My needs then dropped quite a bit when my company issued travel cards. The bottom line is what you are comfortable with, and what works for you. If temptation is a problem, obtain an empty coffee can, fill it with water, drop in your anxious credit card, and put this mixture in the freezer. You can still get at the card if you need it, but you have a day or so to reconsider as it thaws out. It prevents snap decisions from getting out of hand.

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