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  • FIRST POST
    • jasonwatkins
    • By jasonwatkins 14th Jun 17, 5:13 PM
    • 1,955Posts
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    jasonwatkins
    Cancelling "Poor Credit Credit Cards" - A Question
    • #1
    • 14th Jun 17, 5:13 PM
    Cancelling "Poor Credit Credit Cards" - A Question 14th Jun 17 at 5:13 PM
    This has probably been asked a thousand and one times, but i've had a search back through the board and can't quite find anything that gives me the advice i'm after so i hope it's ok to ask in a new thread.

    The TL: DR summary is : Will it be better to use two "poor credit" credit cards for small purchases to repair my credit rating or would it have the same effect if i closed both accounts ?

    Basically, I've got one Luma card and one Ocean card, both with the basic starter £200 limit. I'm also on ESA Benefit.

    Without getting in to the whole backstory, for the best part of the past 9 months, they've both been maxed out and I've been paying the minimum payment each month because that's all I can afford, so, inevitably, the available balance has slowly trickled down to the point it's at now where both have about £13 available to spend.

    Last December I did actually cut up and destroy both cards because I didn't honestly expect my situation to change any time soon, if at all, so it made sense to destroy the cards so I at least wouldn't get caught in a cycle of paying the minimum and then spending it and so on.

    Now, fast forward to today and I find myself about to be in receipt of enough money to completely pay off both cards.

    My first instinct was to pay them both off and close both accounts, but I can't quite shake this thought that if I did request two new cards and started to use them as I originally intended to make small purchases and pay them off in full each time, I was wondering if it would go some way to repairing my credit rating ?

    Since i've only been able to afford the minimum payments for such a long time, I've regularly gone over the limit for both cards and i've also been late for a couple of payments as well so i'm just wondering if I should use the cards rather than cancel them.

    The other option is also probably the sensible one as well and it's to pay off both cards but close one account rather than both and still use the one card here and there for small purchases.

    Would using two cards essentially have double the effect on my credit rating or would it just be down to one overall amount of credit i used and paid off ?

    I appreciate it's a 'how long is a piece of string' question but if anyone can spare a minute to give me your thoughts, i'd be grateful - cheers
Page 1
    • zx81
    • By zx81 14th Jun 17, 5:24 PM
    • 14,403 Posts
    • 15,201 Thanks
    zx81
    • #2
    • 14th Jun 17, 5:24 PM
    • #2
    • 14th Jun 17, 5:24 PM
    You need to clear both as fast as you can.

    Once at zero, keep both, use them regularly and clear in full each month.
    • jasonwatkins
    • By jasonwatkins 15th Jun 17, 5:24 AM
    • 1,955 Posts
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    jasonwatkins
    • #3
    • 15th Jun 17, 5:24 AM
    • #3
    • 15th Jun 17, 5:24 AM
    I'm aware of that, but i'm just wondering if using both of them regularly will have more of an effect on my credit rating than cancelling both of them.
    • zx81
    • By zx81 15th Jun 17, 5:32 AM
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    zx81
    • #4
    • 15th Jun 17, 5:32 AM
    • #4
    • 15th Jun 17, 5:32 AM
    See above.

    Keep and use both. You need to build a history.
    • Ben8282
    • By Ben8282 15th Jun 17, 5:52 AM
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    Ben8282
    • #5
    • 15th Jun 17, 5:52 AM
    • #5
    • 15th Jun 17, 5:52 AM
    Do not close either of these accounts.
    • jasonwatkins
    • By jasonwatkins 15th Jun 17, 6:21 AM
    • 1,955 Posts
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    jasonwatkins
    • #6
    • 15th Jun 17, 6:21 AM
    • #6
    • 15th Jun 17, 6:21 AM
    Thankyou. So will i get double the benefit on my credit rating by using two cards ?

    Or will it just be the same if I use one ?
    • zx81
    • By zx81 15th Jun 17, 6:29 AM
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    zx81
    • #7
    • 15th Jun 17, 6:29 AM
    • #7
    • 15th Jun 17, 6:29 AM
    Having two will make you look a little more trusted by lenders.

    There's no 'double the benefit' calculation though. You're talking about shades of grey.
    • jasonwatkins
    • By jasonwatkins 15th Jun 17, 6:35 AM
    • 1,955 Posts
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    jasonwatkins
    • #8
    • 15th Jun 17, 6:35 AM
    • #8
    • 15th Jun 17, 6:35 AM
    Fair enough. My instinct is still to cancel them, to be fair, as I am due another WCA assessment very soon and when I inevitably fail that, I suppose i'm slightly hesitant to have the cards there in case I use them a little more than I should while i'm on a lot less money.

    But I'll decide in the next week or so because the money to clear them off probably won't be hitting my account until next week anyway.
    • Ben8282
    • By Ben8282 15th Jun 17, 7:03 AM
    • 2,071 Posts
    • 914 Thanks
    Ben8282
    • #9
    • 15th Jun 17, 7:03 AM
    • #9
    • 15th Jun 17, 7:03 AM
    If you don't want access to credit because you don't trust yourself not to spend what you can't afford, then I suppose you should go ahead and cancel the cards.
    But if you do plan on using credit in the future and want to maintain a healthy credit history, then there are several very good reasons why these two cards should not be cancelled at this time. Use them each month. Keep the money in your bank. Pay in full preferably by direct debit. This is good for you as well as for your credit files because you, will improve your average bank balance and depending on the type of account you have may even earn you some interest on the money.
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