We have few credit cards and most of them aren't used most of the time. We mainly use 2 or 3 cards only just for the sake of point/mileage. As much as possible we pay in full whenever we can as we can't stand the interest rates. My question is: If we request to cancel the credit cards that aren't used often, will it lower our credit rating? If yes, how come? We are just trying to avoid debt and yet the credit score will be lowered. Please enlighten us. And we thank you for your sharing your knowledge on TV and online. More Power!

The reason cancelling a credit card affects your credit rating is that when the card is cancelled the “history” for that card is closed off. Since you’re planning to close cards that have little or no history, you shouldn’t have any problem at all with your strategy.