Is it better to cancel a Credit Card Account of ask them to redue the Limit

gorbejesus

I have 10 credit cards that I use for personal and work use. I use different ones for different things. i am trying to get a few more cards that will help me but I am being turned down by most cards now.

I was abale to clear 2 cards and transfer the balances onto my barclaycard with 0% interest for a year. Preferably i would like to keep the cards that I have cleared active and use them but thte interest on them is 25% plus and they wont reduce the interest rates.

Would I be better cancelling these 2 accounts altogether and then applying for new cards with other suppliers.

Moggles_2

If you want to reduce your available credit, it's better to pay off the balance and cancel a card completely, as Martin advises. Cards that are closed down and marked "settled" stay on your file for six years and indicate that you can handle a decent-sized credit limit well.

Would I be better cancelling these 2 accounts altogether and then applying for new cards with other suppliers?

I think you have to treat each credit card on its own merits. 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. Others (eg. HBOS, HSBC) reserve their best deals for new applicants.

Which two credit cards are involved?

gorbejesus

I cleared an Egg with £2000 limit and Ulster bank with a £1000 and put both onto the barclaycard.

Egg wont reduce the rates

Moggles_2

gorbejesus wrote: »

I cleared an Egg with £2000 limit and Ulster bank with a £1000 and put both onto the Barclaycard. Egg won't reduce the rates

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

Caution: some lenders will not consider applications from former cardholders for various periods 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 closure of one of its cards, so closing the Ulster Bank account might reduce your choice for a while. In the case of Egg, it's 12 months.

gorbejesus

Thanks for the advice. I need multiple cards for work as I am a self employed travel agent and some of the companies I work with, I have to make multiple bookings but some of them only let you use 1 card per person. So when booking certain things I need multiple credit cards to book large parties of people.

Its not the total amount of credit i am interested in, its the number of cards I need. If I was to reduce the limits on all my cards to just above what I would normally use on them would it be easier for me to get more credit cards.

Moggles_2

If I were to reduce the limits on all my cards to just above what I would normally use, would it be easier for me to get more credit cards?

I would think carefully before reducing credit limits which are already modest. Lowering limits leaves no record on your credit file of the former more generous one. Nor will your credit files show they were reduced at your request (as opposed to the lender's decision). Lowering credit limits can affect future applications for credit if you overdo it and reducing a £1000 or £2000 limit is pretty drastic, IMO. Also, you may not be able to reinstate the old limit, should you change your mind later.

Bear in mind that potential lenders cannot assess the way you handle credit directly. The best indications they have are the payment history and credit limits on your existing cards with other lenders.

In addition to the number of accounts in use (our national average, btw, is five credit cards), lenders look at the extent their credit limits have been utilised. Maxed out accounts make you look stretched, so it's wise to leave plenty of headroom

Other things being equal, it's better (credit score-wise) to have fewer cards with higher limits, than a clutch of cards with lowish limits. So, if you want to reduce your available credit, it's safer to pay off the balance and cancel a card completely, as Martin advises. Cards that are closed down and marked "settled" stay on your file for six years and indicate that you can handle decent-sized credit limits well

Moggles_2

I have 10 credit cards that I use for personal and work use. I use different ones for different things. I am trying to get a few more cards that will help me, but I am being turned down by most cards now.

May I ask how recently and which credit cards turned you down?

There are any number of reasons why a given lender may refuse to extend credit. Many of us here have ten or more credit cards, so I would keep an open mind about the reasons.

For tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide* especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

robnye

if oyu have 10 cards already, its possible you have them with only a handful of suppliers..... therefore they will not let you have any more in the current climate...

also each application, means a search on your credit file, so i would suggest you stop applying for a little while

gorbejesus

I have

Egg ( 5 years )
Barclaycard( 8 Years )
Mint ( 4 Years )
Ulsterbank ( 3 Years )
Flybe ( 1 month )
Capital One ( 2 Years )
Aqua ( 18 Months )
Vanquis ( 18 Months )
Asda ( 1 month )

In brackets how long i had had them

Got turned down for Easyjet and Virgin and Tesco in the last 3 months but got accepted for Asda and Flybe

Moggles_2

Have you considered Halifax? 13 months 0% on BTs is currently available to new customers. There's a 3% handling charge.
Minimum monthly payment is just 1% of the balance shifted

http://www.halifax.co.uk/creditcards/pluscard136.asp

withnell

I'd guess that you pay off balances in full each month as customers pay you? Why not talk to your bank and see what they can offer you from the business? They may well be able to issue multiple credit cards on your account as they will be able to look at your business plan and your business bank account activity and see that money is coming in to pay off the cards