Open Debt Question

Congratulations on paying off your credit cards! Here’s a tailored plan to maximize your financial health and creditworthiness:

Keep Cards Open
- Closing accounts can lower your credit utilization ratio (percentage of credit used versus available) and shorten your credit history, both of which are key factors in your credit score.
- Leave them open, even if you don’t actively use them.
Use One or Two Cards Strategically
- Use a card occasionally (e.g., for recurring bills like streaming services) to show activity and prevent automatic closure due to inactivity.
- Pay the balance in full each month to avoid interest.
Set Alerts and Automatic Payments
- To maintain your discipline, set up balance alerts and automatic payments for any card usage.
Know Inactivity Policies
- Most issuers will not close accounts immediately, but after a prolonged period (typically 12-24 months) of no activity, they might. Check with your issuers to confirm their inactivity policies.

Boost Credit Score: Open accounts improve your credit utilization and average account age.
Access to Emergency Credit: Even if you don’t plan to use them, having access to credit during unexpected events can be invaluable.

If you have multiple cards and feel overwhelmed managing them, consider closing cards with:
- High annual fees (unless the rewards outweigh the cost).
- Minimal credit limits or features you’ll never use.

However, prioritize keeping older cards open to maintain your credit history.