Closing Credit Cards advice

Amy83

Hi,
I’ve read all the articles and a lot of threads about the benefits and disadvantages of closing credit cards. I was just wondering if anyone could help me with following.

Credit Cards I currently have;

Egg Card - £0 balance (£500 limit)
Egg Money - £0 balance (£500 limit)
Barclaycard - £2830 balance (£3200 limit)
Capital One - £0 balance (£2600 limit)
M&S Money - £0 balance (£3500 limit)
Mint - £1,224 balance (£1800 limit)
Natwest - £0 balance (£600 limit)
Virgin - £0 balance (£4200 limit)

So in total I’ve got £16,900 available credit, and am using £4054 of it.

How many do people recommend closing? I’m thinking I should keep it so I have around £8-10k of credit, as that’d ensure that I’m only using around 50% of my available credit.

The reason I’m wanting to close them is that a) a lot of them are dead credit so they’re not very useful (especially M&S ), and b) I’m going travelling for 8 months next year, and would rather cut back on my credit before then, just keeping enough for emergencies etc, then reapply for new cards when I get back if necessary – though I’m not planning on needing new cards as I intend to clear all my balances before I go.

I’m thinking of cancelling;

Capital One – as they give good offers to new customers but I’ve never received a useful existing customer offer from them.

Natwest – they have given me a 6.9% LOB offer before, but with a low limit of £600 it doesn’t seem worth keeping.

M&S – as it’s the most useless card I’ve had. I’ve been with them years and have never had any existing customer offer from them

So if I cancelled the ones mentioned above I’d then have £10,200 of available credit, and I’m using £4054 of it.

Does this sound ok to people? I know there’s no definitive answer to what to close etc, but just wondered if anyone in know could see any problems with what I’m planning?

Thanks

beanielou

Looks ok to me.
If it was me I would also close Egg.

Moggles_2

I would prune Capital One, M&S and NatWest as well for exactly the reasons you've given.

Just be aware that some lenders will not consider applications from former cardholders in the period following closure. The Royal Bank of Scotland stable (which includes Lombard Direct, Mint, NatWest, Tesco & Ulster Bank, as well as RBS itself) makes former customers wait 8 months following the cancellation of one of its cards, so closing your NatWest account might reduce your choice for a while

Amy83

beanielou wrote: »

Looks ok to me.
If it was me I would also close Egg.

I'm keeping hold of egg so I can still use their Money Manager, I've tried First Directs but I prefer Eggs

Amy83

Moggles wrote: »

Just be aware that some lenders will not consider applications from former cardholders in the period following closure. The Royal Bank of Scotland stable (which includes Lombard Direct, Mint, NatWest, Tesco & Ulster Bank, as well as RBS itself) makes former customers wait 8 months following the cancellation of one of its cards, so closing your NatWest account might reduce your choice for a while

Whoops, I've also got a Tesco one which I'd forgotten about. I haven't got any statements, nor do I know the card number, nor do I know where the card is...that could be a difficult one to cancel! I didn't realise they were all the same stable, that'd explain why I only got a 200 limit from Tesco, as I already have Mint and Natwest.

Not planning on opening any more til I get back from my travels (end of Sept 09) so that should be enough time to become a new customer if I need to.

Do all the others have similar length waiting times, or are they generally less?

Also, when I cancel them - do I just get an Experian report a couple of months after to ensure they're properly closed?

Thanks

Superheavy

Hey Amy,

I'd totally advise you to check on the credit report after a few months....I closed down a few cards a couple of months ago, and when I checked on my experian recently, each of them was still showing on the credit file, along with an A&L card from around 4 years ago with a £3.5k limit.

Just to warn you, after checking with the respective card companies, Barclaycard for example only send data to the credit agencies about closed accounts once every three months, so itll take a while to come off your reports.

Moggles_2

Amy83 wrote: »

Do all the others have similar length waiting times, or are they generally less? Also, when I cancel them, do I just get an Experian report a couple of months after to ensure they're properly closed?

Lenders vary in this respect, as with everything else.

Some (eg. HSBC) will not consider applications from former cardholders in the 6 months following closure and in the case of Egg, it's 12 months.

Former cardholders are free to re-apply for another Nationwide credit card, but do not qualify for the 0% introductory rate the second time round.

At the other extreme are Capital One, HBOS, Marks & Spencer and MBNA. They accept applicants a month or so after closure.

In all cases, it's advisable to check your credit reports to make certain the account is actually closed down and marked "settled" before you re-apply

Richard019

Amy83 wrote: »

I'm keeping hold of egg so I can still use their Money Manager, I've tried First Directs but I prefer Eggs

You have an Egg card and an Egg Money card though. Couldn't you just cancel the plain Egg card and use the money manager through your EM account?

Looking at what you've got I would scrap the Egg Money card (but not the normal one). You should then still have access to the Egg manager thing.

I assume the Mint card and the Barclaycard are on 0% purchase deals? If it fits in with the timing of your trip I'd look to BT them to the Virgin card before you go so that you don't need to worry about the expiry date. MBNA are always offering 0% deals to existing customers. The Mint card can then be cancelled with the Barclaycard available for use while you're away.

The Capital One card I would keep for the ID protection but I'd try to get the credit limit reduced if you can do that easily enough. Assuming you have access to your email whilst you're away having free notification of people applying for credit would mean you could get family to report any fraud as it happens rather than you coming back after 8 months to find that you've bought someone a new Ferrari 6 months earlier.

The M&S card might as well go along with the Natwest.

That would leave you with this:

Egg Money - £0 balance (£500 limit)
Barclaycard - £0 balance (£3200 limit)
Capital One - £0 balance (lower limit chosen by you)
Virgin - £4,100 balance (£4200 limit) (you might need to repay a couple of hundred of that inorder to get the BT through.

dhassen

Keep the Egg Money...... you never know when you might need a 'mule'

Other than that I reckon people are pretty much spot on

Amy83

Superheavy wrote: »

Just to warn you, after checking with the respective card companies, Barclaycard for example only send data to the credit agencies about closed accounts once every three months, so itll take a while to come off your reports.

Thanks, I’ve got 5 months to make sure they’re closed and iron out any problems, so it should be ok

Amy83

Richard019 wrote: »

Looking at what you've got I would scrap the Egg Money card (but not the normal one). You should then still have access to the Egg manager thing.

Do you (or anyone) have this? To be honest, me sorting my finances out has had a lot to do with the ease of logging on and seeing it all on Egg Money manager, so I wouldn’t want to loose it. I’ll send a message to Egg to double check. I’ve got a Cash ISA with them too so I’m assuming I can keep it.

I assume the Mint card and the Barclaycard are on 0% purchase deals? If it fits in with the timing of your trip I'd look to BT them to the Virgin card before you go so that you don't need to worry about the expiry date. MBNA are always offering 0% deals to existing customers. The Mint card can then be cancelled with the Barclaycard available for use while you're away.

Thanks for the help but the two cards I’m in debt on are both LOB offers. I may look into the 0% stuff just before I go but am a bit wary as I won’t be working for 8 months while I’m away so might not get any offers to shuffle it around when I get back. I think I’d rather keep it on 6.9%, that way at least I know it’s quite safe and will stay at that rate.

The Capital One card I would keep for the ID protection but I'd try to get the credit limit reduced if you can do that easily enough. Assuming you have access to your email whilst you're away having free notification of people applying for credit would mean you could get family to report any fraud as it happens rather than you coming back after 8 months to find that you've bought someone a new Ferrari 6 months earlier.

I hadn’t thought of the ID protection stuff, thanks. Also a bit concerned about reducing my credit limit though – all the topics and articles I’ve read on it say that you shouldn’t reduce your limit as when new credit card companies do a credit check they’ll see that I’ve had a Cap1 card for 7 years and have only got a small limit – it seems to get alarm bells ringing.