Dumping unused credit cards is best done by writing a letter; Do follow-up check on credit report to ensure proper procedure


My wife and I are trying to close unused credit-card accounts to reduce the chances of fraud and to make sure we don't have too many open credit lines, which we understand can hurt our credit score. But we've read conflicting advice about exactly how to go about closing these accounts. What's the right way?

Once upon a time, most issuers would Iet you close an account with a phone call (although they were notoriously stubborn about reporting the closure to the credit bureaus).

Today, though, credit-card companies are all over the map. Some want a letter requesting the closure; others are still fine with a phone call. Most don't want you to return the cut-up credit card, because fraudsters can intercept the pieces (unlikely, but apparently it's happened).

On the other hand, a reader told me recently that an issuer had refused to close her account because she didn't send back the card.

Many will refuse to close the account if you've still got a balance. Some obviously want to make the process as difficult as possible, hoping you'll change your mind (or that they can ding you with a few more fees before you go).

The best way to find out what your company prefers is to call the toll-free number on the back of the card and ask. Generally, though, it's best to send a written letter (by certified mail, return receipt requested) asking that the account be closed. Include a line that asks the issuer to report to the credit bureaus that the account was closed by you, the customer. That looks better on your credit report than a closure that was initiated by the company.

Allow at least a month for this information to be processed by the credit-card companies, then follow up by buying your credit report from one of the major credit bureaus. Experian's toll-free number is 888-397-3742; its fee is $8. If the account hasn't been properly closed, you can repeat the request and ask Experlan to investigate. That should take care of it.

You're right that having fewer cards reduces your chances of being a victim of identity fraud, where someone uses your good name and credit to rack up fraudulent charges.

You're also correct that having too many open credit lines can be a negative. But, paradoxically, trying fix the problem can cause even more damage.

Don't, for example, cancel your oldest credit cards -- such as the one you got right after college graduation. The length of your credit relationships is important to your credit score. So even if you don't use the card anymore, hang onto it.

Also, don't close a bunch of accounts right before you apply for a big loan like a mortgage. Credit-rating systems look at the difference between your total credit limit and the debt you're carrying. A sudden change in the "headroom" between your link and your balance can make it look as though you're closer to being maxed out.

My question has to do with wills. I recently married for the second time; my wife has been married twice before and has three children from those marriages. She has some money but also considerable debts, We signed a prenuptlal agreement to keep our finances separate, since l want the bulk of my estate to go to my children when I die. At the time, my lawyer suggested that I also update my will. My wife has been objecting to the expense and says the will I drew up with my first wife will work fine, since in that will, too, most of the money goes to my kids. Is she right?

Let's hope -- for your sake your wife is not as crafty as she appears.

A marriage usually revokes a will automatically, unless the will specifically says it is not to be revoked by marriage. With no will the laws of your state would determine who gets what. And because most states, including California give a hefty portion of an estate to the surviving spouse, your wife might be much better off if you don't ever get around to updating your will.

Pulliam Weston will answer questions submitted -- or inspired -- by readers but cannot respond personally to queries. Questions can be sent to her at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, Calif. 90053.

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