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    • 8184mand
    • By 8184mand 10th Oct 16, 5:57 PM
    • 28Posts
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    8184mand
    Credit Cards - Best to Cancel or Keep?
    • #1
    • 10th Oct 16, 5:57 PM
    Credit Cards - Best to Cancel or Keep? 10th Oct 16 at 5:57 PM
    I have got 3 credit cards which are all paid off no balances, one has a limit of £10,200, one £3,400 and one £1200. I am hoping to purchase a new house next year and I am wondering what will have the best impact on my credit rating - cancelling these cards, or having them still open with a zero balance. Can anyone advise? I also have an overdraft facility which has quite a high limit but not being used so I guess a similar question?
Page 1
    • ukamber1
    • By ukamber1 10th Oct 16, 8:33 PM
    • 101 Posts
    • 30 Thanks
    ukamber1
    • #2
    • 10th Oct 16, 8:33 PM
    • #2
    • 10th Oct 16, 8:33 PM
    I have got 3 credit cards which are all paid off no balances, one has a limit of £10,200, one £3,400 and one £1200. I am hoping to purchase a new house next year and I am wondering what will have the best impact on my credit rating - cancelling these cards, or having them still open with a zero balance. Can anyone advise? I also have an overdraft facility which has quite a high limit but not being used so I guess a similar question?
    Originally posted by 8184mand
    I no expert but think as long as all those credit cards (and overdraft) are still active, they will effect the amount you can borrow when applying for a mortgage. Even tho the balances are at 0 Lenders can still see the credit available to you and that will likely impact on your affordability. Its a good idea to have a credit card open and active as using it and paying it off each month shows Lenders you can manage your accounts but when the time comes to make that new house purchase and apply for a mortgage it might be a good idea to close down 1 or maybe 2 of those credit cards...

    Hopefully someone will jump on thread and confirm...

    best wishes
    • zx81
    • By zx81 10th Oct 16, 8:36 PM
    • 12,516 Posts
    • 12,681 Thanks
    zx81
    • #3
    • 10th Oct 16, 8:36 PM
    • #3
    • 10th Oct 16, 8:36 PM
    I wouldn't worry - the limits aren't that big and you're not carrying balances.

    Make sure you keep using them to maintain a good credit history, clearing in full each month.
    • SparklesJD
    • By SparklesJD 11th Oct 16, 9:03 PM
    • 72 Posts
    • 110 Thanks
    SparklesJD
    • #4
    • 11th Oct 16, 9:03 PM
    • #4
    • 11th Oct 16, 9:03 PM
    Some lenders don't like to see large 'available balances' when they search you - I know we wouldn't like it (small community lender). The most you could borrow would be under £15k + overdraft, which mortgage lenders might be OK with, as it's a smallish amount in the grand scheme of things, as zx says.

    I'd be tempted to close a couple (keep one for emergencies and larger purchases) if you're not using them, just so you're not tempted to use them on stuff for the new house! Keep an eye out for them increasing your limit too.
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