Frugal Living

Why Cutting Up Your Credit Card Isn’t the Answer & How Derby Advisors Can Help!

It’s tempting when you’ve taken the decision to kick your finances into touch, stop relying on debt and start living a more frugal life, to cut up all of your credit cards and never use them again. It’s tempting, but it perhaps isn’t the wisest thing you could do. Sure, on the surface, it sounds like an excellent idea, which is why so many people do it, but the fact is, there are many good reasons to keep your credit cards active. Here are some of them:

Age Matters to Your Credit Score

Keeping your credit score as high as possible is pretty important if you ever want to get a mortgage, car loan or access to several other vital financial services, and get the best deals.

One thing you should know about your credit score is that a fair part of it is determined by age. The longer you’ve had a credit card, the better, because it gives lenders a longer period of time over which to assess you. So, if you have one or more credit cards that you’ve had for a while, don’t cut them up and close the accounts – that could impact you negatively – simply remove them for your wallet, freeze them in a block of ice so you can’t use them or well, do anything that stops you spending without destroying your cards completely.

You Can Benefit from Them

Some of the best credit card offers include travel miles, cash back, sign up bonuses and all manner of other neat things that can actually help you to live more frugally. The last thing you want to do is lose access to them completely when all you really need to do is curb your impulse to spend. I mean, cash back alone can make a big difference to your monthly budget if you use your credit card right, pay for everything with it and then immediately settle the balance when the month draws to a close!

Rebuilding Your Credit Score And How Derby Advisors Can Help

If you’ve been in debt and you’ve defaulted on a few things for whatever reason, then you’re going to have to rebuild your credit score at some point if you want to be able to lend (sensibly) in the future. One of the simplest ways to do this is by using your credit card regularly, and as mentioned above, paying the balance off in full when it’s due. Of course, you could later apply for a credit card for people with bad credit, but this could backfire. How? Because it’ll be another application on your file and you might be turned down anyway. It’s much easier to keep your credit card around. If you are in over your head when it comes to paying off your credit cards, it would be wise to seek out some help with your Credit Card Debt Consolidation, that is where the experts from Derby Advisors can be beneficial to helping you rebuild your credit score.

Maybe Cut it Up

All that being said, if you really can’t control yourself when it comes to credit cards, it might be worth the potential pitfalls of cutting up your credit card if it saves you from spending more and more and more. It isn’t ideal.  But if that’s the only option left available to you, go ahead and cut that thing up!

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