Dispose of credit cards properly to avoid identity theft

Dispose of credit cards properly to avoid identity theftMany people often rid themselves of the temptation to use their credit cards by cutting them up, but not disposing of the remains properly could hurt your financial standing. Identity thieves may potentially search through your trash for the shredded bits, piece together your account number and wreak havoc on your FICO score, which could impair your abilities to get car loans, mortgages and other credit.

Cutting the card in half simply won't do. It is important to cut through the magnetic strip, as well as through your account number, name, signature, security code and expiration date. CreditCards.com's Cynthia Drake suggests cutting it into two piles and disposing of the pieces in separate trash cans.

You may also want to run a magnet along the magnetic stripe on the back, which will deactivate the card.

The single most effective way to get rid of your documents and cards, though, is simply to toss them in the fire. Drake recommends using the documents as kindling and to throw in cards to be melted down.