I posted on here awhile back, I was in over my head with 25k in debt with credit cards, a 30k student loan, and a car loan, plus a mortgage. I was recently able to pay off ALL 25k in credit card debt, (still have auto loan at 13k and student loans now), and was able to be lucky enough to get into another mortgage on my parents house which I bought. What do I do with the credit cards now ? I canceled some of them, but still have a few that have a total of 15k on them. BTW, this is a very good feeling to have finally gotten rid of all of them.
Credit is a necessary evil in today's world. If you cancel them all, you might see your scores go in the toilet. Put the cards in a sock drawer, but watch for annual fees, etc. that might appear when you are least expecting them. At the very least, keep your oldest card open, and use it monthly for a small purchase or two. We used to recommend buying a tank of gas once a month - but that isn't a small purchase anymore.
Keep at least one of them "active'' - for minor purchases like gas, a meal, odds and ends, emergency things (like car repair). Your credit score will take a major dive if you don't have at least one unsecured credit card but only secured accounts like loans.
You also want to make sure that you have sufficient limit that your utilization ratio stays low. They aren't evil. Credit, used effectively, can actually help you build wealth by delaying when funds are actually paid. However, you have to develop the will power to buy only what you would buy with cash, put the money aside (it should be in an interest-bearing account, even if the interest rate is small), and pay the bill a week before it's due. That way, you've bought something and not paid on it for a month or maybe slightly more, while you've gotten interest on the money. There are also cards that give you a rebate on purchases. For example, I have a Shell MasterCard. Everytime I buy gas at a Shell station, I get 5% of that amount credited to my card that is applied to future purchases. Right now, that's 16 or 17 cents a gallon. Not even the most discount station is that much lower, so I'm actually saving quite a bit on gas. I have a long commute, and this sure adds up. So, credit is not evil, credit cards are not evil. Having the discipline to use them correctly is necessary, though, to keep you out of trouble. The misuse of credit is bad, I'm not sure I'd say evil, though.
As stated above, it's a good idea to keep the accounts open, and active, as long as possible. This helps your FICO score. If you're concerned about "using them"( and the sock drawer seems too tempting), one of the oldest tricks is to freeze them in large blocks of ice in your freezer. This gives you the "thinking time" while they thaw!.
