Should I close or cancel my credit cards?

Before you make that decision, consider all factors. One thing to keep in mind is that part of your Credit Score is determined by the percentage of available credit that you use.

For example, if you have 4 credit cards with credit limits of $5000 each ($20,000 total available credit) and have a total debt of $1000, you are only utilizing 5% of available credit. If you canceled three of the cards, you would reduce your available credit to $5000 and you are now utilizing 20% of your credit. This may have a negative effect on your credit score. The same thing applies when you lower your credit limits.

The ideal solution is always to pay your bill in full each month! That leaves you with available credit and can help your credit rating!