Should I keep credit cards I don't use?

gjs1701

I am an unashamed rate tart. Over the past few years I have switched my balance around no end.

I currently have a Virgin card that has my transfered balance on. I have a Play.com card that I spend on.

I have Egg, Halifax, Barclaycard, Amex and Nationwide cards that I no longer use. They amount to over £20,000 in unused credit (Amex have just introduced a fee for non-use, so I will cancel that one).

Is there any reason not to keep them?

Moggles_2

IME, Barclaycard and Virgin have regular, follow-on offers which you can use to your advantage once your balance is paid off in full. OTOH, Halifax and Nationwide reserve their best deals for new applicants, so if you want to reduce your available credit, I would probably close one of those along with the Amex card.

Also, I would think twice about closing Egg or Virgin, as these allow you to route funds via your current account.

RhinoSimon

No. If you apply for future credit for say a motgage deal ot to tart your active CC then the total available credit would be factored into the scoring and may lead to the finance company refusing you credit. Remember all those applications when they ask you "have you ever been refused credit...." you would have to say yes making further refusals likely and severley damaging your credit rating. Close redundant accounts as soon as they are finished with.

BigDave81

I think it completely depends on what you plan to do in the coming months, year etc.

I have 5 cards, 4 of which I have not used since September 2008 and one that I use for all purchases and I don't seem to have any problems with credit and finance.

I obtained minimal finance for a car warranty at the end of last year and also for HP on new car this June, which I turned down anyway due to terrible rate.

I guess it's all dependant on your previous credit history and as said what plans you have for the next year

izools

Also keep in mind, if you are an unashamed rate tart, and you close your unused credit card accounts, you stand a very good chance of being able to open a new credit card with that company six to nine months later and transfer the balance back.

Typically ex-customers are fully eligible to re-apply and get new customer benefits as long as their old account has been closed six-nine months.

So there are monetary benefits in the scheme of things, as well as credit score benefits

Moggles_2

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

cos_2

If you called Egg and asked, "Is there any reason not to keep them (all the cards)?" I wonder what they would say? Then you could call Halifax, Barclaycard, Amex and Nationwide and ask the same question.

I suspect absolutely no-one on this website can give you an answer that matches each of these companies' potential replies.

Personally, I had 4 cards until a couple of months back and chose to drop one I wasn't using. I guess it might score badly, but I don't really know.

Until a company chappie chooses to come on here and spill the beans, we'll remain in the dark, I'm afraid.

RhinoSimon

The OP asked for reasons not to keep inactive cards and the fact that each card will show in a credit search as available to the OP to use will effect their score and likelyhood of being offered credit. The company will look at the risk of you defaulting, if you have 5 CCs each with a limit of £2.5k that is a total of £12.5k that you could use immediattly they have issued you with a new loan or card with a similar sum. They WILL take this into account.

Izools makes a good point, you can always tart as a new customer to CC companies that you have dealt with in the past as long as that is the case..... your past not present.

gjs1701, only you know what your future plans are and how likely you are to need additional credit. I was in a similar situation last year when my mortage deal came to an end. My friend works as a mortgage arranger for a large high street bank and she advised that better rate products were available to customers with higher credit scores. The fact that you have the available credit might not lead to a refusal (although that is a risk as I stated above) but it will effect the deal that you were offered.

property.advert

Never close anything. You can always rotate some spending on a card now and then just to keep them active. You never know when you will need them.

Contrary to the worries about having access to lots of credit but owing little or none, when applying for a mortgage, then I would not fret.

Having a credit agreement which you are up to date with (string of "0"s on your record) and having no balance is hardly going to worry someone. Not having credit or being near your overall credit limit would indicate a potential problem however. Then when you need more credit, your circumstances may have changed or you may not want checks on your file. No, do not disguard old cards.

Eydon

I closed my Halifax card (I got one automatically when the old Amazon Mastercard was withdrawn), and within three months both Virgin and Abbey had raised my limit on their cards to compensate.

BigDave81

I must just add something that came to mind though, I asked AMEX to raise my limit to purchase a car so I could get Nectar points and then pay the card off in full with savings and they said no.

Their reasoning was that I had too much available credit and could go on a maxing spree.

Worked out ok though as I said I wanted to cancel the card then and they gave me a nice load of Nectar points to stay, although with the same limit.

Asked Nationwide the same day to raise my overdraft so I could still purchase the car as the savings were in an ISA and they put it straight up in that conversation to £4500 from £2500, that was over a year ago and it's still the same.

I don't think I'll ever understand how banks and credit card companies operate!