Do people cut up credit cards?

Perspective52

Hi all,

Do people cut credit cards up? I know that sounds naïve, but I have 300 on a card, but want to get rid of it. I am in debt by 7000, is it better just to budget your actual salary?
People say that if you use your credit card it can rebuilt a credit rating. I wont be debt free for a couple years yet, so is it worth rebuilding a score if your still in debt?

Pixie5740

The £300 card limit isn't part of your income to spend. You budget what you have coming in and that doesn't include overdrafts and card limits.

At the moment you are in debt. Do you want to borrow more money most you clear your debts? Hopefully the answer to that question is no in which case you don't have to worry about improving your credit history for now. Note that's credit history not credit rating because there's no such thing as a universal credit rating.

Puddylove

Budget to your actual salary.

And if you can't control your spending, you could cut the card up, or freeze it in a block of ice in the fridge (thawing it takes time so you have to wait before you spend). Or ask a trusted person to hide it for you (don't give them the pin).

P x

sourcrates

Have cut cards up many times over the years, as long as you have a card with a balance on it, you are in debt, no two ways about it
If you keep using credit, you will never be out of debt, depends if you can reconcile the two.

SailorSam

I received a new Debit card this morning, it expires this month. In the letter that came with it, it said to cut up the old one across the chip.

northerner999

Somehow I still find myself surprised at people who have debt but post about building their credit ratings.

They do not exist. End of.

Each lend r has different criteria they judge by, universally situations will improve if people forget about unimportant and non existent credit ratings and focus instead on sorting your debt.

enthusiasticsaver

credit ratings are unimportant unless you actually want to borrow money which is not a good idea if you are already in debt. The only exception to that is moving high interest charging borrowing to 0% or lower interest rate borrowing. My advice would be to not use a credit card but budget on your salary and pay off the card asap. When we were tight on money we did away with credit cards altogether and only reapplied for them once we had some leeway in our budget. Otherwise you end up paying a chunk of it off from your salary at the beginning of the month leaving your salary short to pay for the rest of the month spends.

Newlywed_Saving_Ninja

I cut up my cards, end of temptation immediately!!! I wouldn't worry about credit ratings for now, concentrate on reducing your debt. Like someone above said, they are a kind of nonsense, as all companies have different criteria, so there is no universal credit rating.

ShakeItOff

I have cut up cards in the past. I also thought that it was important to be able to build a credit rating, but actually, if anyone was to ask me now, I would suggest having an honest conversation with yourself - are you responsible enough not to go mad and spend a lot, and then be able to comfortably repay it? (No, turns out I'm not). If there is a risk that you might spend and not be able to repay, it's worse for your credit history.

Anyway... Yes, I have cut up cards as I'm slowly realising that I am not responsible enough not to overspend.

alexrcraig

I think most people cut credit cards up because they have a spending problem. They have a problem spending money they do not have.

I do not cut my credit cards up, but that is because I have my spending under control. As long as you are not spending more money than you make, you can pay off the credit card expenses you make and pay a little extra to pay off your card then it should not be a problem.

But credit card use does not effect your credit card like most people think. There are things like your history line and credit utilization rate. For example how much debt you have compared to how much you can take out. A rate close to 100% will drop your score. A rate close to 0% will increase your rate.

Here is more about what is calculated in your credit score:

myfico.com/crediteducation/whatsinyourscore.aspx (I am not supposed to post URLS since I am new)

So none of it has much to do with you actually using it.