Hi, Kathy I agree that you shouldn't physically carry more than one. With all the information about internet phishing schemes, one wouldn't think that the most likely source of identity theft or fraudulent use of credit cards is from employees of stores and restaurants where you surrender them temporarily. But who knows what is happening with them while they are out of your sight for ten minutes or more? That said, if I'm going to be a victim of identity theft in that way, I'd rather it be through a credit card than to see my bank account emptied by fraudulent use of my debit card. You can fix either one, but your house payment and other bills won't bounce if your credit card gets run up. And you can put a block on it without immediately having to make other checking account arrangements. Like any tool of modern convenience, a credit card is a double-edged sword. It pays to learn all you can about how they work and turn that knowledge to your own advantage. Cheri

Hi, Sandy I thought so, too. That's why I was so shocked that I hadn't written about it yet. I've known about it since joining ATI, over two years ago. I apologize that it took me so long to bring it up here. Thanks to a reader on the Bits and Pieces thread for again bringing it to my attention. Cheri

Here's a piece of good news about the Universal Default clause: According to a story posted June 26 on http://www.indexcreditcards.com, a site that tracks credit card offers and publishes credit industry news, the concept is coming under attack and some cards have removed it from their agreements. Here's the story: ====================================================== New York State Moves to Outlaw Credit Card Universal Default Clauses According to various news reports from New York, the state's legislature has sent a bill to Governor George Pataki that would make it illegal for credit card companies to raise cardholder interest rates under "universal default" clauses in credit card contracts. Universal default clauses written into some credit card issuers' terms and conditions allow the issuer to raise the cardholder's interest rate if the cardholder is late on any bill, including being late on bills entirely unrelated to the payment of the credit card itself. While credit card companies who use the clause say universal default--which can cause rates to jump from the teens all the way past 30%--are protection against customers with a track record of not paying their bills, consumer groups argue that they are simply a way to make money from unsuspecting customers. After the initial uproar over universal default clauses, several issuers removed them from credit card contracts. Estimates vary on how many still use the clauses, but it is generally agreed that it is less than half. ===================================================== I'm operating under the assumption that all my cards have it, but it might be a good idea to check your card agreements and make sure. If you no longer have your agreement, call the customer service department to get a copy or to ask about this clause. Cheri

Hi Cheri,

Good topic, thanks for sharing. I have quite a few credit cards but don't use all of them regularly. I have heard that if you cancel your account this could negatively affect your credit rating. Have you heard that? I would like to cancel several credit cards that I haven't used in more than a year.

Credit card companies sure take advantage of us don't they? Too bad we need to use them sometimes.

DonnaZ

Hi, Donna, You're welcome. Here's the scoop on canceling credit cards, the pros and cons. Pro: If you cancel cards you don't use regularly, you will be relieved of the burden of keeping track of them from time to time. My daughter left one open at my suggestion (you'll see why in a minute) and it backfired bigtime when someone, most likely an acquaintance or someone who had temporary possession of her card, like a restaurant server, posed as my daughter and had the name and address changed. Then proceeded to run up about $400 worth of charges before the card was frozen for non-payment. Six months later a collection agency tracked down my daughter and demanded payment, with interest. She managed to take care of that, but it caused her a great deal of stress and wasted her time. Because she didn't use it, she didn't expect a statement, and was unaware that it had been diverted. So, if you leave them open, you MUST pay attention to things like the absence of a statement. You should still get a statement with a $0 balance every month. If you don't, contact the card issuer immediately. Con: Credit issuers like to see a long history of how you handle your credit, and they also look at the ratio between what you owe at any given time and the amount of your total credit line. (This can be a double-edged sword due to the Universal Default clause.) In general, if your total credit line is commensurate with your ability to re-pay, but you have not used all of it, you are considered a good credit risk. If your accounts are aged, so much the better. So, if you plan to buy a house or a car, you want a few unused, long-term accounts to show on your credit report. If you have no plans to do either of those things, it may not be worth the hassle of keeping them open. On the other hand, people experience unexpected change all of the time. If I were you, and not planning on a new mortgage in the near future, I would close all but two or three of the oldest accounts. That should serve your purpose without placing an undue burden on you for keeping track of them. You might also want to get a membership in a low-cost ID Theft protection plan. Several Adland members provide them, including Alan Smith who is (or was last time I knew) a Pre-Paid Legal representative. Thanks for your questions, Donna. Cheri