Dear Liz: I’m 75 and getting forgetful and disorganized. My prior excellent credit rating has suffered due to late payments because of this. I’d like to simplify my finances by getting rid of extra credit cards, but this will negatively affect my rating even more. Why isn’t there some means for elders to simplify their finances without negative consequences? Some may ask why I care about my credit rating at my age. Well, if there was a major quake and I needed to borrow money to rebuild my condo, it would be important.
Answer: It’s not always possible or even desirable to maintain the highest possible credit scores. Sometimes, other factors must take precedence.
In your case, the most important consideration is making your finances more manageable. You’re correct that cancelling cards could further damage your credit scores, but the impact should be temporary as long as you responsibly handle the cards you keep.
Consider hanging on to one or two cards with the highest credit limits. Credit utilization, or the amount of your available credit that you’re using, is a big factor in credit scores so you’ll want to keep high credit limits if you can. If you’re closing other cards with the same issuer, ask that your credit limit from the closed cards be transferred to the card you’re keeping.
Also, set up automatic payments so that you never again miss a payment. You typically can set up automatic payments to cover the minimum balance, the statement balance or a fixed dollar amount. You can do this online or with a phone call to the issuer.
You should have a document known as a power of attorney that designates someone to handle your finances should you become incapacitated. You’d be smart to start involving that person now so that they’re familiar with what needs to be paid and when. This person could help make sure you’re keeping up with your financial tasks and could take over if you’re feeling overwhelmed.
If you don’t have such a person in your life, please investigate your options. An estate planning attorney or tax pro might have some recommendations, or you can check out the services of a daily money manager. You can learn more at the American Association of Daily Money Managers.
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