Mike MichalowiczBusiness Author & Keynote Speaker Empowering Entrepreneurs

Money Answers Part 7 - Q&A Cancel or keep credit cards? #money #shorts #creditcards

27 Apr 2026 · 1 min

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In this short Q&A, Mike Michalowicz challenges the common advice to cancel credit cards when in debt. He argues that canceling can cause rebound effects and that the priority should be gaining control over one’s money first. He recommends two practical tactics: (1) lower the credit limits on cards as a way to manage debt without focusing on credit‑score optimization, and (2) assign each credit card to a specific purpose—such as a dedicated subscription card—so that spending categories are clear and manageable. Once disciplined behavior is established, credit‑score‑improving actions can be considered. The overall message is to use credit cards wisely rather than ditch them.

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Everyone says to cancel your credit cards if you're in debt. You've said not to cancel credit cards. I'm confused. Yeah, I'm not saying cancel your credit cards. That's true, because the potential rebound and retaliatory effect. What I am suggesting is we need to get our credit cards in control. There's a few ways to do it. One way is when you start reducing debt, to actually lower your credit limit. No, this is not a way to optimize your credit score and all that junk. The most important thing is you controlling your money. That's why I call financial independence not money controlling you, you control your money. Once you assert control of your money and you're consistently doing it well and your behavioral aspect has kind of been wired appropriately, then we can do things to improve your credit score. The other thing you can do with a credit card is you start allocating to purposes. So I have a subscription credit card and only subscriptions go on there. So I have absolute clarity every time one of those bills come in from that credit card company, I know what category it's in. And it gives me more control and authority over it. So I don't ditch credit cards, I use them more wisely.