Closing accounts - negatives ?

PoorPaul

Bit of background here might be helpful, sorry if its waffle.

I've held a current account with Barclays for what must be about 15 years now. Earlier this year, I switched to A&L but kept my Barclays account open with a few quid in (<£100) but unused since switching.

Having a growing dislike for A&L for various reasons, I'm moving away from them as much as possible. However I have a 10% reg saver with them, and so intend to open up another 'good' current account elsewhere (possibly the Halifax one) but ensure A&L is fed with the min £500pm to keep it running, the intention being to close it once the year (and hence good rates) is up.

Now for the main point....

I was going to close my Barclays account as I can't see a reason to keep it open.

But is there one ? E.g. will closing it affect my credit score and if so why ?

If I apply for a new product, e.g. a credit card, that asks for bank account details I wouldn't declare the Barclays one as I don't use it - honest, but is that the right thing to do as the other account(s) wouldn't have been open very long ?

Advice and opinions much appreciated.

Thanks, Paul

EagerLearner

I'd leave it open with £1 in it - then you can say you have 'a' bank account that you have held for 15 years. If you are applying for something new and want to impress them, maybe put that bank account on the form.

then when it gets accepted, call them up and say you have changed bank accounts and give them the new details...

To be honest, I do wonder how much it matters anymore as people switch around so much these days!

grumbler

PoorPaul wrote:

..I was going to close my Barclays account as I can't see a reason to keep it open...

And I cannot see a reason to close it unless you have a very high overdraft limit (that can be lowered). I think, lenders like stability. You can always declare this account (even unused) as an extra sign of stability. I keep my oldest account (also Barclays) only for this ...

PoorPaul

Thanks for the replies.

grumbler wrote:

And I cannot see a reason to close it unless you have a very high overdraft limit (that can be lowered). I think, lenders like stability. You can always declare this account (even unused) as an extra sign of stability. I keep my oldest account (also Barclays) only for this ...

The only real reason is to keep things 'tidy' I suppose. Not sure what the overdraft limit is on the account off hand, but what would you consider high for an unused account and why is a high one not necessarily a good idea in this case - I wouldn't have thought it mattered ?

As you can probably tell from sticking with one account for so long and never using an overdraft facility I suppose I'm only just starting to explore the murky world of banking....

grumbler

PoorPaul wrote:

...what would you consider high for an unused account and why is a high one not necessarily a good idea in this case - I wouldn't have thought it mattered ?....

I wouldn't have more than a few hundreds overdraft limit on the dormant account, although this depends on your (income) / (available credit) ratio. Each overdraft limit adds to the available credit and more close the total amount is to your annual income, the more important this overdraft limit is if you need to get further credit.

Cancel unused credit cards, debts and accounts. Access to too much credit, even if it isn't used, can be a problem. If you have a range of unused credit cards, cancel most of them; this lowers your available credit and should help

Martin, Check and improve your Credit Score article

From this point of view there is no difference between a credit card and a current account with an overdraft. Both are reported to CRAs.