Cancelling A Card

digitalvibe

I've read some conflicting thoughts on canceling credit cards. I've heard canceling a card you've paid off can negatively effect your credit rating (which seems odd) and I've heard that canceling a card you've paid off can actually be beneficial when applying for a new line of credit from a card company.

What's the general consensus?

Robert_Sterling_3

What is wrong with continuing to use it?

digitalvibe

The low balance transfer rate has now lapsed and as you might imagine the new APR is absurdly high. I want to transfer my balance to a new card with a better deal but before I apply for that card I want to know what impact there is on the application process if I have a card with a high line of credit that I'm not using.

Innocent_Guy

If you are thinking of applying for a new credit card sometimes by having to much "available credit" will force the lender to reject you. Buy reducing this amount of "available credit" you become less risky and are more likely to be offered a better card and higher limit

digitalvibe

Thanks for that. It's this school of thought that I'm trying to confirm. I've also heard canceling a card can be damaging to your credit rating. Anyone else heard this?

digitalvibe

Anyone else able to weigh in on this?

Moggles_2

The national average is five, so if you have five credit cards or fewer and none is maxed out, it's unlikely your credit rating would be harmed by keeping them, unless you have a lower than average annual income. That said, with each successful credit card application, your available credit will increase in relation to your income and there will come a point when you must consider closure.

I think you have to treat each credit card on its own merits. IME, some card companies (eg. Barclaycard, MBNA) have regular, existing-customer offers and MBNA will even waive BT fees sometimes, if you're prepared to negotiate over the phone. At the other extreme, some lenders (eg. HBOS, HSBC) reserve their best deals for new applicants.

In general, unless a card has a particular benefit, then I would close the account. Firstly, having lots of credit, even if not used, may put off potential lenders and secondly, by cancelling a card you can re-apply to that provider as a 'new' customer and take advantage of any introductory deals on offer.

Another good reason for phoning customer services to cancel an unused card is that occasionally you're offered an incentive to stay

ravenk

I have lots of cards I dont use anymore.
Must be over 24 !
They all have zero balance.
I have a couple of active cards , a Virgin card with 0% that runs out in April 2009.
I have tried to apply for a another 0% card and been refused.
I know my credit rating is good, I have checked it online a few months ago.

Is it the old cards and my available credit that is hurting further applications for cards ?

I no longer have some of the old cards and no longer get statements.
Can I just cold call the card call centres and not knowing the credit card numbers , but other personal details on my self ...cancel the cards ?

ravenk

p.s. ....I do still the occasional batch of cheques come in the post from some cards I have , offering 0% deals .....but now I need one ...I bet none will arrive ....lol

withnell

If you have 24, then yes, that will be a major factor in stopping you getting other offers.

ravenk

I will have to start phoning about Monday and start to cancel the ones I dont use or even seen cards or statements for during the last few years :-)

Do some Company just auto cancel them , from lack of use ?