Nill balance credit cards and credit scores

kcmoon

Hello,

I'm just wondering if someone can answer this question. I have two credit cards that I've paid off and wanted to close the accounts so that my credit rating doesn't dive-bomb because it looks like I have too many credit cards. However, when I called one of the credit card companies the person said that it doesn't do me any harm to keep hold of the credit card because of the travel insurance benefit I get with them.

So, my question is, will my credit score go down if I have quite a few credit cards all with a zero balance?

Thank you,

Moggles_2

Obviously, we don't know your annual income or your available credit, but I believe the national average is five, so if you have five credit cards or fewer in total, it's unlikely that keeping both would affect your credit rating adversely

mparter

It would all depends on the lender and what your current credit limit total is. If you've got £10k in credit available and £0 balance and then apply for another card, the lender might wonder;

a) why do you need another card if you've got 2 with zero balance, and
b) if they were to give you a card, the your potential indebtiness goes up. So if you suddnely lost your job and started spending on your cards, how would pay it back.

Essentially the risk for the lender goes up. If you've got credit cards with zero balance and you don't use them, get rid of them. if they are zero balance because you clear the balance every month, then this could help your "credit score" but lenders will have a limit as to when they will stop lending to you based on what you already have available.

CannyJock

kcmoon wrote: »

So, my question is, will my credit score go down if I have quite a few credit cards all with a zero balance?

Zero balance's don't adversely affect your credit rating. Unused available credit will.

Why not keep one card for emergency purposes, or even better, spend on it each month and clear the balance in full to maintain a positive repayment history on your credit report?

Moggles_2

CannyJock wrote: »

Zero balance's don't adversely affect your credit rating. Unused available credit will.

May I ask how many credit cards you have on the go, CannyJock?

CannyJock

Moggles wrote: »

May I ask how many credit cards you have on the go, CannyJock?

6 at the moment (40K limit), reduced from 12 over last few months (65k limit)