The old-school advice to keep you from running up a balance on your credit card was to freeze it in a block of ice. The idea: Your impulse to spend would go away before the block thawed. But freezing your credit is a different matter entirely and a drastic step taken by those dealing with identity theft. Here’s what you need to know about credit freezes and the pros and cons of freezing your credit.

What does it mean to freeze my credit?

Freezing your credit makes it inaccessible to everyone, including you or anyone who pretends to be you. When your credit is frozen, lenders and furnishers are unable to view your credit history, and therefore unable to extend you a credit line or any other product that requires good credit. You can unfreeze your credit whenever you want by contacting the three major credit reporting bureaus and providing your PIN, but it may take a few weeks to “thaw.”

The costs of freezing and thawing your credit will depend on your state laws. Most states charge you a fee to freeze your credit or temporarily lift a credit freeze, but allow you to remove a freeze for free. It’s free to freeze your credit if you can prove you’re a victim of identity theft. Check out the freeze fees for your state at Experian, Equifax and TransUnion.

Why should I freeze my credit?

If you’re dealing with identity theft, it may be wise to freeze your credit. No one will be able to open credit accounts in your name, which can save you the hassle and cost that comes along with having your identity stolen. Identity-theft victims won’t have to pay freezing fees, and putting a freeze on your credit won’t hurt your credit score.

You can consider freezing your credit if you won’t need to access it for a long time. If you have a mortgage in place and aren’t planning on moving for the foreseeable future, don’t need a car loan or new credit card, and don’t have an adult child who needs a cosigner, a credit freeze can be a good option for you.

» MORE: How to dispute fraudulent credit card charges

Why shouldn’t I freeze my credit?

The problem with freezing your credit is your inability to access it. You can always lift freezes on a temporary basis, but you’ll have to pay fees to each of the three credit bureaus — assuming you aren’t an identity theft victim — and it may take some time for the freeze to lift.

Also, you may still be susceptible to credit fraud. A credit freeze won’t affect your current accounts. So if a thief steals the information on an existing account, your credit may be used without your permission.

You shouldn’t freeze your credit if you need to access it in the near future, especially if you might need to access it more than once. The hassle of freezing, lifting, freezing, lifting, and freezing again is too much unless you have serious identity theft issues. And remember, creditors aren’t the only ones who may need access to your credit. If you’re getting insurance or a new cell phone contract, your credit will need to be accessible. Again, you’ll have to lift your credit freeze.

If your wallet or credit card was stolen, and you’re afraid of identity theft, you may want to place a fraud alert before resorting to a credit freeze. A fraud alert on your credit reports tells potential creditors to verify your identity before issuing credit in your name. Check out this article on how to place a fraud alert on your reports.

The takeaway: Placing a credit freeze may be a good idea if you’re worried about or dealing with identity theft and don’t plan on needing credit access in the near future. However, if you will need access to your credit, a fraud alert is a better option to minimize your risk of becoming a victim of credit fraud.

Money frozen in block of ice image via Shutterstock