DH & I also have several cards with no balance on them. We will be applying for a mortgage soon, so I asked my banker this question. He told me to cancel the majority of the cards, but to keep either a couple with fairly low limits or one card with a pretty decent limit. He said that banks like to see someone have $30,000-$40,000 worth open credit on cards (depending on your income). He says that lets them know that you have a source of available money that you can access quickly. He said they don't like to see huge amounts of open credit because that shows the potential for a problem. We pulled our own credit reports & they said that the amount of unused credit we have may actually be hurting our score. We have only a tiny fraction owed but a lot of open credit. Another thing my banker & the credit report mentioned was the ratio of how much you owe to the amount of open credit. Example: If you owe $5,000 & have two cards with a total credit limit of $20,000, cancelling one card that has a $10,000 limit can actually hurt you. Instead of having a balance that equals one quarter of your available credit, you will now owe an amt. equal to half of your available credit. If you want to cancel, make sure you write a letter to the credit card company & keep it & proof that you mailed it on file. Make sure to request that they note in your file that the card was cancelled at your request. Having a lender cancel your card can hurt your credit score. If you won't be applying for a loan any time soon, you can just leave them & they will drop off of your credit report after a few years.

Everything I've seen/heard about this is not to cancel credit cards. Cancelling them does affect your credit scores. That said, at one point I had 3 separate credit cards issued by the same bank. I use only one and pay the balance in full every month. I have received letters from the bank requesting that I either use the cards or said cards would be cancelled effective 30 days of the receipt of said letter. I didn't use them, and those accounts have been cancelled. DH hates credit cards and prefers to pay cash for purchases. I did check with the 3 credit bureaus regarding whether the cancellation by the bank for lack of use of those two cards would affect our credit scores. All three claimed that it would not, and I did manage to obtain fax confirmation of that assurance. I did pull reports at 90 days after their cancellation, and our scores hadn't changed. Unless the card company contacts you about cancelling for lack of use, I wouldn't cancel.

I had a Sears card many years ago, didn't use it. A year ago last Fall, I bought a freezer and to get an additional discount + sale price, signed up for and put the freezer on a new card that day (they said the old card no longer valid). I was surprised to find myself with another MasterCard, not a Sears card. Paid the bill in full when it arrived, and just before the holidays a few weeks ago I called and asked them to cancel the card, I kept getting mailings, offers, and there was very little chance I would ever use the card. I have one for business, one household, and one I keep in my desk for online orders, booking reservations, more than enough. They argued slightly, then agreed to cancel the card for me.

There are two kinds of chip cards - chip and pin and chip and signature. Chip and pin, like ATM cards here, require entering a PIN to authorize a charge. They are very safe, reduce fraudulent charges for in person use significantly, and are virtually un-counterfeit-able. They have been the standard for many years for credit cards issued almost everywhere in the world EXCEPT in the US. In Europe and Canada, when you are in a restaurant, for example, they bring a little machine to you. You insert the card and then need to enter your PIN, for the charge to go through. The newly issued chip cards in the US are chip and signature. What's the difference between that and what we used to have? Not much. The old style mag strip cards were easily to counterfeit. The chip takes the place of the mag strip to identify you. They can't be counterfeited but they can still be stolen and misused. It disables the ability of the bad guys to make phony cards but otherwise, offers little boost in security over the mag strip only cards. There is a small but growing number of US card issuers that offer chip and pin cards. I got one a few years ago after encountering situations abroad where my mag strip or even newer chip and signature cards couldn't be used.