Idle Card Effect on Credit File

beatlestones

Hi there,

Quick question - I have four cards, two with balances that are paid in full each month and two (although I've closed one of them today) that were 0% credit cards that have no balance on them.

Question is I want to apply for a new 0% card as it comes in handy for emergency purchases if they arise. In order to get the best limit am I better to wait until my credit file is updated to show that I've closed one of the 0% cards, or will it be clear that I always had a zero balance and pay off my other cards?

Thanks in advance

Moggles_2

Lenders do not disclose the criteria they use to decide on credit limits, but your available credit in relation to your annual income is likely to be a factor.

Obviously, we don't know your income or your available credit, but if you have four credit cards in total, this isn't excessive. I believe the national average is five and some of us here have considerably more on the go.

lisyloo

I always suggest closing cards.

Apart from the possible credit rating implications, there are id theft and fraudulent use issues which you might not pick up on immediately.
So if your card is stolen or used fraudulently you might not notice for some weeks until you receive a monthly statement.

Low usage fees can also be sneaked in when you aren't looking.

Furthermore it stops you getting "new" customer deals.

Therefore I say, close them if you don't think you will use them again.

The only counter argument is that credit is not as freely available as it was, so always leave yourself some lines of credit open.

NickX

I think it depends in the cards. Some cards are worth keeping open for the repeat deals that they offer. I'd never close a card from the MBNA stable for this reason.

I recently got a 0% deal with NO FEE on an Abbey Zero card that I hadn't used for a while. If I'd closed it, I would have missed out.

My own experience is that you really need a lot of cards and available credit before it starts to hamper further applications. I have had 14 cards before now.

sparkey1

Bear in mind that sometimes lenders will look at % of credit utilised. So by closing a card with a large limit, you are increasing your % utilised figure as a whole, and this could make you look bad.

So closing an account isn't always the best idea.

Moggles_2

I agree.

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 and Mint 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.

NickX wrote: »

I recently got a 0% deal with NO FEE on an Abbey Zero card that I hadn't used for a while. If I'd closed it, I would have missed out.

Congratulations, Nick
:beer:
Abbey/Santander recently offered me a no-fee 0% BT as well on an Abbey card that was left dormant for 12 months.

beatlestones, with just four ccs and none maxed out, it's unlikely your credit rating/credit limits would be harmed by keeping all four cards, unless you have a lower than average annual income.

simon_hannan

lisyloo wrote: »

I always suggest closing cards.

Apart from the possible credit rating implications, there are id theft and fraudulent use issues which you might not pick up on immediately.
So if your card is stolen or used fraudulently you might not notice for some weeks until you receive a monthly statement.

Low usage fees can also be sneaked in when you aren't looking.

Furthermore it stops you getting "new" customer deals.

Therefore I say, close them if you don't think you will use them again.

The only counter argument is that credit is not as freely available as it was, so always leave yourself some lines of credit open.

I would add, That one who wishes to keep all their cards and keep their current credit limits should use all the cards at least every 3
to 4 months, as i have experienced my limits being reduced to next to nothing when the cards have not been used for a while typically 6 months