DEAR BRUCE: Since the banks are all paying 1 percent or less for CDs, is it better to give in to the banks, or to just not keep your money in the bank at all? — Pamela, California

DEAR BRUCE: Since the banks are all paying 1 percent or less for CDs, is it better to give in to the banks, or to just not keep your money in the bank at all? — Pamela, California

DEAR PAMELA: Some banks are paying more than 1 percent, but it is still a very small amount. For example, with checking accounts that pay 1.5 percent, you can take the money out whenever you wish with no penalty, a far better deal than a 1 percent CD. That having been observed, you can't just put the money in a shoebox under your bed. Most of the money market funds are paying a very tiny amount of interest. Unfortunately, the saver right now is being penalized. There are corporate stocks that are paying a decent dividend and all together paying more than 5 percent. I am sure you can understand that there is a degree of risk, however small. That is your call. Hopefully, the Fed is going to start raising interest rates — getting over some of the paranoia about inflation — and savers will at least be partially rewarded.

DEAR BRUCE: I have several department store credit cards that I have not used in many years. I would like to cancel them, but I am told that canceling cards can lower your credit rating. My credit rating is 800. I own my house and car and all of my bills are paid in full every month. I don't want to risk my credit rating. What do I do? — M.A., via e-mail

DEAR M.A.: Like you, I have department store cards that I have not used for many years and a couple I have not used at all. The only reason I opened them was because I was making a large purchase and by opening a card, I was promised a 10 percent discount on my purchase. Congratulations on an 800 credit rating; very few of us are fortunate enough to have that high of a score. It is true that canceling credit cards will lower your credit rating, but since you are not using them and they are not charging any kind of a fee to keep them placed, where is the advantage in canceling them? Put them away or cut the cards in half, and check your statements from time to time to make sure there is no identity theft, but other than that, there is no advantage to you canceling them. Sooner or later the stores will cancel them, due to non-use, and that doesn't affect your credit rating.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.