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  • FIRST POST
    • Dribiddi
    • By Dribiddi 1st Oct 17, 6:48 PM
    • 55Posts
    • 22Thanks
    Dribiddi
    Closing a card with a balance on it
    • #1
    • 1st Oct 17, 6:48 PM
    Closing a card with a balance on it 1st Oct 17 at 6:48 PM
    I have about £5k owing on a credit card. I have a few others with a zero balance
    When the zero interest period ends next year can I close the account and pay the remaining balance off over a year or two? Would this be reported as a negative to the CRAs?
Page 1
    • pcman1985
    • By pcman1985 1st Oct 17, 7:02 PM
    • 133 Posts
    • 71 Thanks
    pcman1985
    • #2
    • 1st Oct 17, 7:02 PM
    • #2
    • 1st Oct 17, 7:02 PM
    Why not just apply for a 0% balance transfer card or ask one of you card providers with a zero balance if they will give you a balance transfer offer.

    The worst thing that can happen is a no or a decline. Nothing to lose.
    • Dribiddi
    • By Dribiddi 1st Oct 17, 7:13 PM
    • 55 Posts
    • 22 Thanks
    Dribiddi
    • #3
    • 1st Oct 17, 7:13 PM
    • #3
    • 1st Oct 17, 7:13 PM
    I could but you pay a transfer fee.
    Would there be any negative to closing the card a and paying off the balance over time?
    • zx81
    • By zx81 1st Oct 17, 7:27 PM
    • 14,403 Posts
    • 15,201 Thanks
    zx81
    • #4
    • 1st Oct 17, 7:27 PM
    • #4
    • 1st Oct 17, 7:27 PM
    No, but there would be no benefit to closing the card, unless you don't trust yourself not to spend on it.
    • pcman1985
    • By pcman1985 1st Oct 17, 7:36 PM
    • 133 Posts
    • 71 Thanks
    pcman1985
    • #5
    • 1st Oct 17, 7:36 PM
    • #5
    • 1st Oct 17, 7:36 PM
    As ZX81 said there will be no negative markers as long as you pay at least the minimum on time every month.

    Also, yes you would pay a transfer fee to bamance transfer. However this is normally about 2-3%.
    Once the 0% interest runs out you will be paying 18-20% interest of the balance over a year. If you plan to pay the 5K off over 2 years, this till be between £900 to £1000 interest, where as the fee to baknce transfer would be about £100 to £150.

    If you paid that over a 2 year period, you would pay approx £5150 rather than approx £6000 if you continue paying off the current card when it starts incurring interest. You save your self about £850 a year by transferring if approved.
    Last edited by pcman1985; 01-10-2017 at 7:39 PM.
    • Anthorn
    • By Anthorn 2nd Oct 17, 1:17 PM
    • 3,294 Posts
    • 847 Thanks
    Anthorn
    • #6
    • 2nd Oct 17, 1:17 PM
    • #6
    • 2nd Oct 17, 1:17 PM
    I have about £5k owing on a credit card. I have a few others with a zero balance
    When the zero interest period ends next year can I close the account and pay the remaining balance off over a year or two? Would this be reported as a negative to the CRAs?
    Originally posted by Dribiddi
    Depends on how you do it:

    You should be able to stop a credit card so you can't use it and then make your repayments according to your credit agreement. That should not affect your credit history.

    If you arrange a payment agreement directly with the lender because you cannot afford to keep up the agreed payments that's a negative. In this respect the light at the end of the tunnel is a DMP (Debt Management Plan). The DMP manager should try to arrange repayments you can afford and also try to agree with the lender the account not being defaulted and the lender is not obligated to do that. Check out StepChange.

    Overall though, if you don't keep to the original credit agreement count on the account being defaulted which is of course a negative on your credit history.
    • anythingbutordinary
    • By anythingbutordinary 2nd Oct 17, 4:58 PM
    • 21 Posts
    • 3 Thanks
    anythingbutordinary
    • #7
    • 2nd Oct 17, 4:58 PM
    • #7
    • 2nd Oct 17, 4:58 PM
    You can, but you'd still have to pay interest on the remaining balance even if the card is closed. It would probably be cheaper to balance transfer it, as others have said.
    • zerog
    • By zerog 3rd Oct 17, 1:52 PM
    • 2,306 Posts
    • 785 Thanks
    zerog
    • #8
    • 3rd Oct 17, 1:52 PM
    • #8
    • 3rd Oct 17, 1:52 PM
    No, but there would be no benefit to closing the card, unless you don't trust yourself not to spend on it.
    Originally posted by zx81
    Actually yes, there might be, if you close the account then they can't increase the interest rate.
    • Nebulous2
    • By Nebulous2 3rd Oct 17, 7:05 PM
    • 1,654 Posts
    • 1,003 Thanks
    Nebulous2
    • #9
    • 3rd Oct 17, 7:05 PM
    • #9
    • 3rd Oct 17, 7:05 PM
    Actually yes, there might be, if you close the account then they can't increase the interest rate.
    Originally posted by zerog
    But if you keep paying and they notify you of an interest rate increase you can close it at that point then run it down at the existing rate. That is more likely to be a straightforward process than an unprompted attempt to close it with a balance.
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