Personal finance expert Suze Orman had some excellent advice to share with us on the topic of whether or not to close inactive credit cards.
Suze recommends keeping all credit cards open, even if you don’t actively use them, especially those that do not charge an annual fee.
Another reason to keep inactive credit card accounts open: it helps boost your credit (or FICO) score. “30% of your credit score is made up of your debt, or what you owe to the credit card company,” she told us. Essentially, by keeping all of your credit cards open and paying off that debt, your debt-to-credit limit ratio improves.
“You want a 30% debt-to credit limit ratio or less for a good FICO score,” she told us.
Get one on one financial advice from Suze here.
For more advice on managing your money, see Suze's personal finance tips:
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