Should I Activate New Credit Cards?

Tips to manage your credit score and debt ratios.

Q. I have a balance of about $10,800 on an American Express card that has a limit of $11,500. I also have three other accounts that I haven't used in a while, with a total credit limit of $6,800. When those cards expire and the issuers send me new ones, should I activate them or allow the accounts to expire?

Go ahead and activate your new credit cards. With that $10,800 balance, you are already using 59% of your total available credit of $18,300. That's too high a percentage. Scott Bilker, founder of Debtsmart.com, recommends that cardholders use no more than 50% -- and as little as 30% or less -- of their available credit, if possible. If you cancel the cards, your usage will shoot up to 94%, which will lower your credit score.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Senior Reporter, Kiplinger's Personal Finance