Clearing Out Cancelled Credit Cards

By Heather Johnson

They act like magic wands opening doors for you and letting you buy anything you want, but be warned that these seemingly innocent pieces of plastic have the power to tie you down irrevocably with chains of debt. The day you wake up to this fact and decide to get rid of all but one or two of your credit cards, you find yourself with two problems:

• Canceling credit cards can hurt your credit score.
• Once you cancel the cards, no matter what the consequences, you’re left wondering how best to dispose of them so that they are not misused.

The first issue is relatively easy to deal with:

• Cancel the cards that are relatively new and keep the ones that you’ve had for a while. This helps you establish a longer credit history.
• Once you cancel your cards, you will see a dip in your credit score, but with good credit behavior where you pay all your bills on time, do not exceed spending limits and limit your expenditure, your score will rebound to its original status within a few months.

Now that you’ve cancelled your cards, one problem has been taken care of.

The next thing to do is to make sure you don’t lend your cards to misuse by miscreants. Simply throwing them in the trash can is the worst thing you could do, especially in these days when it’s so easy to have your identity stolen. Use your ingenuity in disposing of cancelled credit cards:

• Shred your cards or tear them into small pieces before you throw them out. Spread the pieces into two or three trash bags so that they cannot be put together again.
• Scratch the magnetic strip on the card with a knife or any other sharp object.
• If your card has an embedded smart chip, dip it in water and microwave for a minute to destroy the data on the card.
• If you are still paranoid about your card holding personal information, dip it in a solution of acid, nitric or hydrochloric.

Whatever method you choose, make sure your cards do not end up leaving you penniless even though you no longer use them.

This post was contributed by Heather Johnson, who is an industry critic on the subject of college grants. She invites your feedback at heatherjohnson2323 at gmail dot com.

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