Paying off Credit cards and keeping them open vs. closing


 I have several credit cards. Some visas, some store cards. I am working on paying them all off ASAP. I have two store cards I have already paid off one has a credit limit of 300, and one has a credit limit of 2,000. Two of the others I am looking to pay off is a Visa with a credit limit of 2,800 and another store card with a credit limit of 2,100. (I know this is a lot of credit cards).  And my USAA credit card has a credit limit of 7,000


I was wondering if it woul be better to pay off the balances and close the accounts or pay them off and keep them open. Should I do this for some or all credit cards. 





Hi Micaha,

Thanks for posting.


One of our Certified Financial Planners answered a similar questions here:


I encourage you to contact our team of Financial Advisors here at USAA who can give you advice based on your specific situation and needs. They can be reached at 800-771-9960.


Best of luck!

Closing the credit cards could negatively impact your credit rating.


On the other hand, paying them off and leaving them open will help your credit score. You could leave them open and just use them twice per year to help maintain good credit.



I was like you once a long time ago. I was 40,000 in the hole. I sold my truck, took all of my SRB money and sold 40 days of leave and paid off all my credit cards. Then I closed them all except for 1, the USAA credit cards. Heard all the same arguments, oh it's going to damage your credit score, banks won't give you a loan. Yea, yea, yea. Today I still have the same USAA credit card, still paid off, credit score of 812. And a house, and two paid off cars and 250,000 I. Retirement funds and growing. Pay off those cards and keep your USAA credit card. You can use it anywhere, you don't need all of those other cards.


How likely are you to overextend yourself if they remain open and you use them?  Temptation can be a powerful thing, and should not be overlooked. 

If you keep them open but don't use them, you will have to keep the cards in a secure place. (and then don't forget where they are located - lol)


How long have you had these credit accounts open?  If you opened them all at the same time and they are fairly old, then perhaps closing one every few years?  Or close off the newest accounts?  That would minimize the impact to your score from the "Length of credit History" component of the score.


I have several cards that are 7-10+ years old, and I have not closed them.  Once you have paid off your cards and you decide to keep them open / active, you could consider my method.  I dislike carrying cash and I prefer to rotate my monthly purchases amongst the cards.  I rotate amongst the cards to ensure that no card gets a balance that is too high for me to pay off by month end. 

  • This is possible for me because I have a routine amount of spending every month, and savings in place to handle any unexpected events. 
  • If your spending habits fluctuate, you can recreate a debt problem that it sounds like you are working your way out of. 
  • If you don't have emergency reserves yet, using all your cards routinely can hinder your ability to handle emergencies.
  • I can not stress strongly enough that credit cards are not a replacement for emergency savings.  If I have a vehicle malfunction (aka, my car broke down or a tire blew out), I will use the card to pay the mechanic.  Then I will try to reduce my spending for the remainder of the month. But my emergency fund will have to step in to pay the card's balance if i couldn't adjust my month's spending before the card's due date.


Example (I'm using round numbers for convenience) -- Your monthly expense budget is $500.  This means that you can pay $500.  You have 5 cards.

Spend up to $100-ish on card A, then put it away and use card B. Spend up to $100-ish on card B, then put it away and use card C.  So on.  Then when it is time to make the monthly payment, each card's balance is lower and easier to handle than if you had put it all on one card.

[this is also handy if your cards have different due dates. 

If they are all due on the first, then you are paying out $500 on the first, regardless of it is going to 5 companies or 1 company. 

But if A is due on the 1st, and B/C are due on the 10, etc., then you are paying $500 a month, but not all at once.]

[I don't personally rely on the due date juggling - If I mistime or forget, it can fall apart like a house of "cards" (pun intended)]


Thank you for this helpful advice EEE3!