Dave Says: Don't Need Those Cards

Dave Ramsey
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Posted: Jul 23, 2015 12:01 AM
Dave Says: Don't Need Those Cards

Dear Dave,

I have two credit cards. One charges me an annual fee of $79 and the other a fee of $39. Should I cancel these and not worry about my credit score? I’d like to buy a house in the next two or three years.

Ken

Dear Ken,

In my mind, there’s no such thing as a good credit card. My advice is to go ahead and cancel them.

When you stop borrowing money and don’t have any open accounts, your credit score will slowly disappear. The big thing is that you don’t want to be caught in no-man’s land in terms of a credit score. You want either a fabulous one, which means you’re in debt all of the time, or you want no score because you don’t have any open accounts.

By the way, did you know that you can still qualify for a mortgage, even with no credit score? There are still mortgage companies out there that will do manual underwriting. It takes a little extra effort, but in my mind that’s a small price to pay.

Cancel the cards, Ken. I’ve never met a millionaire who prospered thanks to credit cards and their gimmicks!

—Dave