Does a large number of credit/store cards really affect one's credit score?

pb3

I decided to apply for a new credit card earlier this week.

One of the questions asked during the online application was "How many credit, charge and store cards do you have"

Up to then I admit I've never counted them. I did a count and realised I have racked up 17 over the last 2 decades :eek:

I considered abandoning the application there and then, but decided to press on.

I was surprised at the end when my application was successful. So I guess card 18 will be with me shortly.

The common advice on the group is to cancel dormant cards. However I notice that more and more cc companies are cutting credit limits and some are even closing accounts. Furthermore new cards are becoming harder to obtain. Given this am i best advised to hold on to the cards I have?

Moggles_2

I was surprised at the end when my application was successful. So I guess card 18 will be with me shortly.

May I ask which credit card is involved?

Moggles_2

The common advice on the group is to cancel dormant cards. However I notice that more and more cc companies are cutting credit limits and some are even closing accounts. Furthermore new cards are becoming harder to obtain. Given this, am I best advised to hold on to the cards I have?

There's no perfect answer that suits everyone - or even the same person at different times - because circumstances vary.

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 all of 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, Virgin) have regular, existing-customer offers and Virgin which belongs to the MBNA stable 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

pb3

Moggles wrote: »

May I ask which credit card is involved?

I've sent you a PM. Perhaps I'm being overly paranoid but I prefer to wait until after I actually have the card in my hand before making it public.

Thanks very much for the points you made in your followup post.

nomoneytoday

IMHO the number of cards is less important that whether you are paying off the monthly payments on time