Zero Balance Credit Cards, Close or Use?

Credit Cards
1

In December, I’ll be retiring at Full Retirement Age.
I’m currently working full-time and receiving SS Benefits.
In February I had $6,500 credit card debt, which is today, all paid off.
Is it wise to close the three accounts?
I’m thinking that I’ll keep them “active” by using them for monthly streaming services, (auto-payments of $15 or $20 monthly), paying each in full each month.

Edit:
Currently 2 MasterCards and one Amazon Store card, (good only for online Amazon purchases),
I have monthly Prime membership fees on the Amazon card. Each of the 2 MasterCards has recurring monthly $20 charges for streaming svcs.

But perhaps I’m hearing it may be somewhat beneficial to carry a hundred or so on each card.

2

I stopped using my Discover card and after several months of inactivity, they closed it for me. I have 3 open credit cards that I pay in full everymonth. I’ve been retired 6 years and my FICO score is 824, so they aren’t hurting me.

3

The highest credit score I ever had was in 1999 when I had a mortgage, it was in the 830’s.

Since 2000 I’ve carried zero debt save for the monthly credit-card bills that we always pay in full each month. For that entire time my credit score has never been above 820.

The people with the highest scores are likely carrying debt because monthly long-term debt payment performance is part of the formula the agencies use to come up with your FICO score.

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4

As noted it is best to keep the balance as close to zero as possible. For a reason I can not understand, a balance in the 0.5-1.5% range is slightly better than a 0% balance.

Link to the FICO scoring system:

5

Even if that’s true, a higher credit score isn’t worth paying interest on a credit card balance. Keep the cards open, but pay them off every month.

6

You never know when you might need the credit cards in the future – some travel, or an emergency car repair, etc.

I currently have 2 credit cards that I use fairly often-- one for food/gas, the other for other purchases. The 3rd one, I use occasionally to keep it active. I used to use it for online purchases, but now I use Privacy.com (see below). I had some fraud on one card, so it was good to have another card available.

I never carry a balance. My credit score dropped when I paid off my mortgage and has never returned to its former glory. But it’s fine for me now, so I don’t worry about my FICO score!

I have also frozen my credit at the 3 credit bureaus, for security. If needed, I’ll unfreeze them.

My vote is to keep the cards, use them occasionally to keep them active, because you may need them!

PS – I also use Privacy.com – virtual credit cards for online purchases and subscriptions or monthly charges. I find this much more secure, especially for online purchases. Privacy.com links to your debit card or bank account.

I learned the hard way with the credit card fraud incidents I had that cancelling the card messes up some charges – my card was cancelled, and then payments made using that credit card didn’t go through (like my cell phone monthly charge!). Then I got the new card and had to change my payments over to the new card. But in the meantime, payments were missed and I had to scramble around!

With Privacy.com, each virtual card is for one vendor only–no other vendor can use it. I can also set limits on each transaction, or monthly/yearly limits.
I’ve been using it for over a year now and haven’t had any problems.

7

After you retire, if you ever need more credit cards for whatever reason, you may have trouble qualifying. I’m in the same boat, retiring soon. I’m not adding cards, I make small occasional purchases on all of them, but only two are my mainstays

Mains: Fidelity, Costco
Secondary: Amex, 2 from Capital One

I’ve learned to not burn financial bridges. I had a credit union account which I was thinking of closing, then I realized they had a great CD rate, so I bought one. Also I started using their safe deposit boxes.

I have an Ally account where I keep $1 in checking, $1 in savings. It’s hooked to my TreasuryDirect account, so I don’t want to clip it off… it’s pain to add new accounts to TreasuryDirect.

If one account gets hacked, or they decide they don’t like you any longer, or you don’t like them, you need places to go in a hurry, without the faff of opening new accounts, being a new customer and under increased securitty scrutiny, etc.