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Save Your Finances, Save Your Card

3 tips for improving your credit without closing your cardShould you keep your credit card accounts open while continuing to rack up debt, fees and interest charges or close them and become a cash-only customer?

Or you might ask yourself if you should close a credit card because it has unfavorable terms, poor customer service or has done something wrong to you.

The answer: An open credit card account can help your credit score.

It adds good payment history records, a higher credit ratio and shows lenders you can be trusted with credit. A closed credit card account does exactly the opposite.

Here are three ways to improve your financial future without closing your credit cards:

Give your cards away. If you find that a piece of plastic gives you the uncontrollable urge to spend, the problem is not with the credit card, it’s with you.

Consider handing off your cards to a loved one while you seek help on managing your finances. We recommend members of the National Foundation for Credit Counseling, the nation’s biggest and oldest credit-counseling organization.

Pay your bills on time. I know a lot consumers who complain about their credit card terms, but this problem is easy to fix.

Pay your account on time and in full each month. Interest and fees will no longer be of consequence, and it will give you time to look for a better credit card. Closing your account will most certainly ensure the next card you open will have even worse terms.

Be patient with customer service. We’ve all dealt with idiots on the other end of the phone, but credit card issuers do have good people in place to handle the problems and needs of customers.

If you’re stuck on the phone with someone who doesn’t appreciate your concerns, ask to speak with their supervisor or simply with another agent. You may spend a little more time than you want to solve a problem, but it beats calling in 10 times to get what you need done.

Stay calm the whole way, and you may even be able to bank a little cash from the issuer for your troubles.

Closing your credit card account is rarely a good idea.

Keep that account open and find a different way to solve whatever problem you have with your account. In the long run, your higher credit score will save you more money than this credit card account will cost you by keeping it open.

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