Elisabeth Leamy Answers Your Questions

Helpful suggestions from readers

Comment: Who can afford to "just let the cards go dormant" when banks are starting to charge annual fees? You'll really be paying something for nothing! I just canceled my Bank of America card for that reason, even though I never carry a balance. ~plet39

Comment: Most of this information is very good, very timely, and very necessary to save some money, but I do have to disagree with one point: Transferring balances between accounts can be a very costly tip. Most banks charge a transaction fee for making the transaction, and then charge a cash rate, a much higher rate than for that of purchases. If you're going to use this trick, it would be advisable to find one of your lower balance cards and make sure it has a balance transfer offer. Many offer 0% on balance transfers, usually for a very limited amount of time, like 6 months or 12 months. This can be very helpful when attempting to pay down balances on accounts with higher rates. Thanks for the good information!

Answer: Thank you for these two well considered comments. These writers make great points. The first comment was in response to my suggestion that canceling credit cards can hurt your credit score, so it's better to let them go dormant by cutting them up and not using them. The second was about the tactic of moving money around among your credit cards so that no card is too near the limit. Regarding transfers, the idea is to do this just once, but, yes, you should be careful. Regarding dormancy, of course, you will want to consider what to do with each account on a case-by-case basis.

Rising Rates, Lower Limits

Comment: She's obviously not up with reality these days. I've had full credit accounts closed by my bank because of the "economic climate" and not through any fault of my own. In addition, they SLASHED my available credit on my remaining card. So now my utilization ratio is ruining my once excellent credit. The credit scoring industry needs to be cleaned up. There should only be ONE score and it should be transparent in how it's figured. I'm currently doing everything in my power to pay off my credit card balance so my score will go back up, but I'm very frustrated to be so powerless with my credit score. I've never paid late or been in default with any loan/credit card, so why should my score plummet because of a decision by the credit card industry?

Answer: I understand "anonne's" frustration, but -- come on now -- do your homework! I have been covering the issue of credit card companies lowering limits and how that affects people's credit score for months now. To see one of those stories click here. http://abcnews.go.com/GMA/story?id=6993495&page=1

Comment: Good credit score equals slavery and bondage. The credit card companies just upped their rates on people who have been great customers for years and years. Mine went from 8 to 16 percent. they're trying to beat the new regulations -- thanks guys. Every time the government tries to help me -- I pay for it. ~putneyvermont

Answer: I continue to cover the issue of higher rates and lower limits, including a story on ABC News' "World News" just last week. As part of that story, I posted helpful hints for fighting back, including how to find a credit union you are eligible for. Click here.

Find more consumer news from Elisabeth Leamy here.

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