Credit Card Renewal - Cancel?
In today's mail, I unexpectedly received a credit card renewal for a
Mastercard that I hardly ever use. It was unexpected because my
existing card wasn't due to expire until June 07. The new card that I
received extends that by two years.
In reading through the letter, I was shocked to see how high my credit
limit was on this card. (I'll be checking the limits on my other cards
today....) It is way more than I would ever need, and makes me more
than a bit uncomfortable of the consequences if ever it gets stolen or lost.
Besides this card, I have 1 Visa, another Mastercard, and 1
DiscoverCard, which should suffice for me. So, I'm considering just
canceling this card altogether.
However, I've read that canceling a credit card account could have a
negative impact on your credit score.
So, I'm looking for suggestions -- Cancel the account? Request a
lowered credit limit? Or just lock up the card in a safe place and
don't use it unless there's an emergency?
Since this is a financial planning newsgroup and we get this question
frequently, I'd like to throw my $.02 in.
I believe that living within one's means is the beginning point for
all good personal finance, and that nothing starts to work until a
person does it. Debt (unpaid balances at month-end) is evidence that
a person is not living within their means.
Yet many consumers worry about their credit rating - it's as though
they are intentionally planning to go into debt. I realize that many
people don't see debt this way (which to me explains why most folks
never become financially successful) - but it does not excuse the
practice.
One way or another we are all involved in products, services, etc.,
but I consider our failure to stress good personal finance (and
avoidance of debt) a black mark on our professionalism.