How many cards is too many?

milan_ns

I have 4 credit cards with no balance on them:
- Barclaycard - £6k limit - use daily for cashback and protection
- MBNA - £6k limit - backup card; use when I travel abroad as Barclaycard tends to get declined often - due their stupid fraud detection system
- M&S - £2k limit - I applied to get 12 wine bottles they were offering at the time
- Debenhams - £1k limit - I applied to get 30% of my first purchase and a free coffee

Is there any benefit to keeping all of them open or should I just cancel last 2?

Would having 4 cards help me with mortgage application?

Mind you I just got declined by Three for a contract (30 day one), even though they kept calling me and offering to renew (I was their customer before). Is this related to number of cards in some way?!

I tried to get that cashback Amex card but also got declined :S. Is this due to fact I don't have any balance on credit cards or what?

Credit scoring/rating is sooo confusing!!

lisyloo

My personal choice would be to close the last two.
Not necessarily because or credit rating concersn but because

1) They are all a fraud/id theft risk, especially if you aren't checking the balances regularly (or maybe even knowing where the cards are in your house).
2) They might stop you getting "new" customer deals.
3) They might introduce a dormancy fee which you might not notice if you don't read the leaflets they send you (who does??)

4 is quite normal so I don't think it's an issue.

The most likely answer is that you simply don't fit the "profile" of these companies.
We don't know exactly what that is and chances are you will never find out.
Sorry, I know that is a totally uinsatisfactory answer, but the companies are within their right to choose who they want to lend to and they don't have to give you an explanation.

It might be a good idea to get your credit reports (Experian and Equifax) just to make sure there is nothing untoward i.e. no mistakes.
But probably it's simply that you don't fit their target profile.

Closing the two cards probably won't have much affect on your credit rating as it's £3K out of £15K, but for the reasons above I would close them.
It's always worth having more than one card though as a back up like you say.

fabforty

milan_ns wrote: »

I have 4 credit cards with no balance on them:
- Barclaycard - £6k limit - use daily for cashback and protection
- MBNA - £6k limit - backup card; use when I travel abroad as Barclaycard tends to get declined often - due their stupid fraud detection system
- M&S - £2k limit - I applied to get 12 wine bottles they were offering at the time
- Debenhams - £1k limit - I applied to get 30% of my first purchase and a free coffee

Is there any benefit to keeping all of them open or should I just cancel last 2?

Would having 4 cards help me with mortgage application?

Mind you I just got declined by Three for a contract (30 day one), even though they kept calling me and offering to renew (I was their customer before). Is this related to number of cards in some way?!

I tried to get that cashback Amex card but also got declined :S. Is this due to fact I don't have any balance on credit cards or what?

Credit scoring/rating is sooo confusing!!

Yes, having a lot of available credit can work against you when applying for other forms of credit, such as a mortgage or additional credit cards. This is because although you owe nothing at the moment, you could at any time go on a wild spending spree running up 13k of debt, which might have a negative impact on your ability to pay the mortgage. You are better off either getting rid of a couple of cards, or at least reducing your credit limits on them.

Rob71

fabforty wrote: »

... or at least reducing your credit limits on them.

That's a good point - not really thought about this before, but obviously the limit shows on the credit report... I've got a large card limit and will need to shift it to another 0% deal in June - I can't close the account, so this looks like a neat work around to improve my chances...

Moggles_2

Rob71 wrote: »

That's a good point - not really thought about this before, but obviously the limit shows on the credit report... I've got a large card limit and will need to shift it to another 0% deal in June - I can't close the account, so this looks like a neat work around to improve my chances...

Obviously, we don't know your annual income, but I would think carefully before reducing credit limits, as these are already modest.

Lowering limits leaves no record on credit files that they were reduced at your request (as opposed to the lender's decision). Lowering limits can affect future applications for credit, if you overdo it. Also you may not be able to reinstate some of the former 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 history-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

Bambywamby

I know American Express uses a dormancy fee - it was introduced in October so the other cards will probably follow suit.

Rob71

Moggles wrote: »

Obviously, we don't know your annual income, but I would think carefully before reducing credit limits, as these are already modest.

Hi Moggles - thanks for the advice, but I'm not the OP...

As you say, settled arrangements still show on your record, and they look good - but I wasn't aware a reduction in limit would?

My interest in this is because I'm planning a significant purchase, and I want to tart the debt for a year - like the OP I want to maximise my chances of getting a decent deal when my 0% ends in June (albeit we want decent deals on different things).

Moggles_2

Rob71 wrote: »

Hi Moggles - thanks for the advice, but I'm not the OP...

Oops ... should have posted before that glass of wine.

As you say, settled arrangements still show on your record and they look good, but I wasn't aware a reduction in limit would [show].

Until recently, only the current limit was shown, so lowering limits left no trace of the former more generous ones.(Some providers have begun to share this info, but most still don't.) Either way, reducing limits leaves no record on credit files that this was done at the customer's request as opposed to the lender's decision.

My interest in this is because I'm planning a significant purchase, and I want to tart the debt for a year - like the OP I want to maximise my chances of getting a decent deal when my 0% ends in June (albeit we want decent deals on different things).

Individual circumstances vary, so it's impossible to generalise. That said, if you have five credit cards or fewer and none is maxed out, it's unlikely your credit history would be improved by reducing your available credit, unless you have a lower than average annual income.

Rob71

Moggles wrote: »

Individual circumstances vary, so it's impossible to generalise. That said, if you have five credit cards or fewer and none is maxed out, it's unlikely your credit history would be improved by reducing your available credit, unless you have a lower than average annual income.

Thx Moggles - I appreciate the feedback- I've sorted my mortgage (which is the OPs prob) for another couple of years, so I'm not too worried about my credit rating (I am, but I'm not, if you see what I mean).

Current income 55k, with 4k HSBC, 3K Tesco (both 0 balance) and 1445/13500 on MBNA - looking to spend 13k on MBNA in Feb/Mar and then transfer (after raiding savings a/c) about 5K from MBNA (when rate finishes) to a new 0% card in June. All green "0"'s and an Experian score of 999 (I realise that counts for nowt!), and (apart from a Next a/c with 3600 limit which is also on 0 balance), I've no other credit (apart from mortgage).

I shall close HSBC/Next on Tuesday (they're not used any more).

I keep reading about "your personal credit limit is 50% of your income", is there any truth in that? In which case I shall close dormant accounts and hope any new card will have a fairly decent limit (thinking 1st Direct Gold card atm, but will look to see what's about a month or so before BT).

Does the above make sense? Am I being rational? Do I sound like someone who might be offered a decent card? Cap1/BarclayCard offered me sh!te rates about 5 years ago (both closed), but then I wasn't quite as "sorted" back then...

PS. Soz for hijacking the OPs thread!

Moggles_2

Rob71 wrote: »

I shall close HSBC/Next on Tuesday (they're not used any more)... thinking 1st Direct Gold card atm, but will look to see what's about a month or so before BT.

Caution: some lenders will not consider applications from former card holders for various periods following closure. From feedback here, the HSBC stable (which includes First Direct) makes former customers wait 6 months, so I'd look elsewhere

milan_ns

Thanks for the advice guys.

I shall get rid of last 2 cards and see if I can get my limit reduced on the other 2.

Does overdraft count as a credit card (I have £2.4k of that, also unused)?