I have this friend who has 12 credit cards. I kid you not. A dirty dozen and he is practically maxed out on each of them. Don't ask what his total tab is. It rivals the national debt.

Naturally, when he asks me what to do, I can only repeat what everyone else says. "Cancel credit cards ASAP." Which as we all know, is much easier said than done. Why? Because with many department and discount stores offering a low 10 percent off to any new applicants, plus an umbrella, and with all of the credit card offers jamming into your mailbox with extremely low percentages, it's rather easy to get hooked.

If you have a lot of credit cards and want to see what they can actually do to you, then simply take a look at your credit report from any of the three major reporting companies. It'll make you gag.

The answer is to start canceling these puppies. You can do it by phone or via a written request. For example, Sears will take a phone cancellation and then they mail you a confirmation of the deactivation followed by notice to the major credit bureaus of what you've done. Some companies, however, will require a specific written request to deactivate.

However, if you do cancel, here's a suggestion. Send the company a certified letter, return receipt requested, instructing that you want to cancel it and to have them notify the major credit bureaus of this advice. In that way, it will be listed as a "closed by the consumer" rather than a report that says the company simply closed the card. The latter doesn't look too good. Hopefully, when you cancel, you'll have a zero balance on the card.

And, let's be frank about one thing: canceling a credit card is, for the most part, not easy to do. The company makes it simple for you to get a card but harder to cancel it. Sort of like marriage. Easy to get hitched, very difficult to unhitch.

Some financial planners suggest that all you really need are two credit cards anyway. Interesting concept. Two? What are they? First, there is one card with, of course, the lowest possible interest rate around, and a second card that offers incentive or perks such as cash-back, or airline miles.

How are these used? According to my friend Fred of Florida, he uses the first one to transfer and pay off balances because the rate is so low, and he uses the second for purchases because he gets some sort of cash-back or airline miles added. Naturally, he tries and pay off the balance each month so the interest rate doesn't even come into play.

One aspect of this is rather appealing. Fred does not believe in canceling a card that he's held the longest. Why? Because credit history is over a third (35 percent, actually) of your credit score and if you close the card with the longest history, then you're simply shooting yourself in the foot. So, what to cancel? He believes in deep-sixing the department store credit cards first, which usually have higher interest rates. Besides, they very rarely offer cash-back or airline miles. However, a tip here. Never close all cards at the same time, because that can throw off your balance owed/credit available ratio on the credit report.

And whatever you do, keep records.

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