Credit Accounts - Question

northernmonkies

Hi, I'm new to these forums (although I have viewed for some time) and I'd like to ask a question which I couldn't seem to find an answer for. I'm not entirely sure this is the correct forum to post this but here we are:

Which is "better" to have:

A large gross total of credit, unused
or
A small gross total of credit, with (for e.g) 45% used?

To elaborate a little, is it better to have 10 credit accounts each with £3000 limit, with less than 1% of it used, or one credit account of £3000 with £1000 used?

The reason I ask is that I have quite a lot of credit accounts for which I haven't even used (but are still active) and was wondering if it would be in my favour to shut them down?

Thanks for any advice!

Peter.

CLAPTON

'better' for what purpose?

northernmonkies

"better" as in either generally viewed as, or as a proactive measure to keep my credit report and any further ability to obtain credit high.

Cheers.

lisyloo

Too much available credit can prevent you getting more.
Too much % use also make you look maxed out.
I'd suggest the latter is better but it is all guesswork as it depends on the specific numbers and the lenders rules.

You should close unused cards because
1) fraud risk if not using them regularly
2) theft risk if in a draw
3) dormancy fees may apply
4) stops you getting new deals e.g. caskback. rewards as a new customer
5) can give you too much available credit

In contrast you should always have some backup lines of credit open and always take spare cards abroad (but you don't need 10).
How much you want to keep as a backup depends on your access to savings, overdraft, flexible mortgage etc.

northernmonkies

Thanks for the advice, I might as well close a few then if it's of no benefit!