Should I cut up my credit cards?
In one paragraph
Personal finance books are split: Ramsey says cut them up to break the debt cycle; Orman and most credit-building guides say keep them open, paid in full, to preserve credit history and score.
What this actually means
Few questions in personal finance reveal the underlying philosophical divide between the major schools of thought more clearly than this one. The answer depends almost entirely on which problem the reader is actually trying to solve.
Dave Ramsey's framework in *The Total Money Makeover* argues for cutting up credit cards — not just freezing them or putting them away, but physically destroying them. The argument is behavioral: credit cards enable spending that cash does not. The friction of handing over a card versus cash is lower, and the ability to spend money not yet earned is structurally dangerous for households with a history of carrying balances. Ramsey's position is that the interest savings and debt elimination that follow cutting up cards outweigh any credit score benefits of keeping them open.
Gail Vaz-Oxlade's *Debt-Free Forever* takes a middle path: cut up the cards you abuse, keep the oldest account open (paid in full monthly) to preserve credit history length, and rely on a debit card for daily spending. This approach targets the behavioral problem without triggering the credit score damage that closing old accounts can cause.
Suze Orman's position in *Financially Fearless* is more direct: closing credit card accounts, especially old ones with high limits, can materially damage credit scores by reducing available credit (raising credit utilization) and shortening average account age. For readers who are not actively carrying revolving balances, Orman argues that the cards should stay open, set to autopay in full, and largely ignored.
The credit-building literature — *Your Score*, *Credit Management Kit for Dummies* — is unambiguous: canceling credit cards hurts credit scores in most cases and should be avoided unless the card carries an annual fee that isn't justified by its benefits.