Keep or cancel an old credit card?
Dear Liz: I have been keeping a credit card that I no longer use because I’m afraid that canceling it may reduce my credit score. I have had the card since 1983, and it shows on my credit report as my longest credit relationship. I no longer have a mortgage. Should I keep the unused card?
Answer: Closing the card certainly won’t help your scores, but it’s impossible to know in advance how much they might be hurt. That doesn’t mean you should never close a card, but you may want to consider alternatives, particularly because this is your oldest card.
Does the issuer offer another type of card with cash back or other rewards? If so, consider asking for a “product change” to the new card. That should preserve your long history with the account while supplying you with a credit card that better suits your needs.
Filling a survivor benef it gap
Dear Liz: I am a 57-year-old widow. My children are 23, 22, 20 and 17. When my youngest graduates in June, I will lose the last of our Social Security survivor benefits. Her check is currently $2,084 per month. I am barely making it now with my mortgage and other bills but will not be able to afford to stay in my home. I don’t know if I would be better off to rent out my home or sell it and buy a condo so my kids have a place to land. I am engaged and plan to live with my fiance (knowing we can’t get married until I’m 60!). What are some things to consider in making this decision?
Answer: For those who aren’t aware, millions of children receive Social Security benefits because their parents are retired, disabled or deceased. The benefits typically continue until the child turns 18, or 19 if the child is still in high school.
Survivor benefits generally are available to qualifying widows and widowers starting at age 60. Remarrying before age 60 can disqualify the survivor.
You obviously need a plan to bridge the gap before your widow’s benefits begin. But the best approach depends on the details of your situation.
You don’t mention how many of your children are now living at home, although it’s not unreasonable to consider how to house one or more of them in the next few years. Your youngest may want to live at home while going to college.
The others may well boomerang home even if they’re currently on their own.
What you’re able to offer will depend on your resources and circumstances. You may need the money from the sale or rental of your home to bolster your retirement funds, for example.
Whether renting or selling is the best move also depends on your circumstances. Selling may be the better option if you can’t rent the home for more than its carrying costs. Even if you could make a profit each month, you may not want the hassles of being a landlord.
Consider scheduling a session with an accredited financial counselor. These advisors are fiduciaries, which means they’re required to put your best interests first, and they often work on a sliding scale. You can get referrals from the Assn. for Financial Counseling & Planning Education at