With the banks starting to charge subscription fee for credit card even when the card is long time holder of the credit card with good history, it is becoming understandable for many consumer to think of shutting down credit cards that they don’t use often.

However, while consumer wish to shutdown their credit card, they also have second thoughts on whether shutting down their cards will affect their FICO scores.

To help consumer to decide whether they should shut down their credit card, they first have ask themselves if they actually have any current balance or debt on their existing cards.
If consumer does not have any existing balance on their existing cards, then they would be able to shut down their cards with a piece of mind that it will not affect their FICO score.
The reason is because the FICO score is calculated based on ratio of credit limit to debt. With no existing debt, it means that the credit to debt ratio is zero. Thus, shutting down a credit card will lower the credit limit but will not affect the credit to debt ratio.

If the consumer already has existing debt on the cards, then it will not make sense for them to shut down the cards hastily because it will affect they credit to debt ratio which in turns hurt their FICO score.
On the other, they should actually subscribe a new credit cards that does not charge any subscription fee. Once they have done so, then they can proceed to shutdown the cards that charges subscription.
In this way, they credit to debt ratio is maintain with the cards that charges a subscription fee shut down.

Again, a reminder to all consumers is that when you open a new credit card, do not start charging up the cards, else it will be worse than staying status quo.

Keeping good credit card usage habit is the key to better financial scores.

In almost all cases when a financial advisor is recommending you a insurance policy, they are always recommending you a life insurance policy. However, is life insurance policy really the way you should be insured?

In order to know whether life insurance is the best option, what we need to do is to do a comparison with the alternative option which is term insurance.

Comparing a 30 term with a life insurance policy, a person roughly of the age of 38 will requires a monthly premium of $100 for a term and $1000 for a life.
The difference is that for a term, the insurance will only be in effect for 30 years while a life will last throughout the life time. And, moreover, a term insurance premium is solely for the purpose of insurance while life insurance usually include the saving component.
However, you will be paying a premium of 10 times more for this differences.

If one is to insured with a term insurance and invest the difference in the premium between the policy, for the next 30 years, a term insurance will actually gives you a better return and much more flexible control of your finances.

In this above example, if you re-invest the $900 difference each month for the next 30 years, you can easily have a portfolio of a million dollars.

Thus, it really make more sense to insure in a term insurance rather than a life insurance.
What’s more, an insurance is to insure you against any unexpected mishap, thus the term “insurance”.
If an insurance serves more than the sole purpose of insuring, then it should not be called “insurance”, and when anyone or any product try to do 2 different things at the same time, the result often is worse than the performance of another that solely concentrate on one.