close credit cards after paying off?

PM1CAS

Hi everyone,
I am about to pay £737+£14=£20 off my debts in town today.
This is less than I hoped but have Easter childcare costs to pay which I had totally forgotten about.

So, tomorrow, my debts will be
1) Barclaycard, £2084.61, 6.9% for life of balance.
2) Natwest c/c £1377.81, 0% for 15 months.

Not too bad, I guess.

My thoughts today are about whether or not I should close the accounts I have paid off. These are:

Cap. 1 £3400 credit available
Argos. £780 credit available
Halifax £2750 credit available
Very £1000 available
Natwest overdraft £450 available

I think I should and it will focus my mind on having just two credit cards and paying those off. What do you all think?

Also, I'm thinking of paying off my remaining debt @£250 a month and it will be clear in a year. I could throw everything at the debt and be clear in 6 months but I find it's too hard and too miserable with kids aged 7 and 9. The interest is 6.9 and 0% so it won't cost too much??

Tixy

Hi

If you had an emergency you had to pay for could you put it on 1 of the 2 credit cards you still have balances on? what would be the APRs for new spending on these cards? and do you have sufficent credit limit in case of an emergency?

I would certainly closed some of your accounts down. Probably capital one and argos would be the first for me.
What is the APR on the halifax card? and what on the natwest overdraft? It might be worth keeping one of those (if its the halifax card then you could always reduce your credit limit a bit).

I suppose the other thing to consider is whether you are the sort of person who if you have credit available will be tempted to use it - if you are then you might want to close down them all.

If you are happy with the debt free deadline of a year (and considering the low APRs) then that sounds good and if you set that as a target hopefully you will be less likey to fall off the debt free wagon than if you went for the 6month deadline and lived at the very essentials level only.

Billy-no-Money

PM1CAS wrote: »

Also, I'm thinking of paying off my remaining debt @£250 a month and it will be clear in a year. I could throw everything at the debt and be clear in 6 months but I find it's too hard and too miserable with kids aged 7 and 9. The interest is 6.9 and 0% so it won't cost too much??

Sounds like you know what you want do!!

The difference in interest is about £40, it's entirely up to you but if your kids have been going without for a long time while you cleared your debts then for their sakes maybe it's a good time to start easing off a bit - after all, there's a difference between budgeting for treats and throwing on the credit card. If your income's secure for the next year then it seems reasonable to do that.

Regarding closing cards - I don't know what effect that has on credit ratings etc, personally I'd keep one for backup but get the credit limit reduced (you need a credit card to hire a car for example, and what if there's ever a problem with your debit card?). I wouldn't keep them all open with lots of spare credit in case I got tempted!

FOURCANDLES_2

Close them down and concentrate on saving thats the way to go.Less C/C and debts you have in the current climate the better.

ElmerFudd

If it was me I would probably close all of them down - definitely if you know you will pay off the other ones within a year. As Tixy says though emergencies tend to pop up so may be a good idea to close all but one (the one with the best APR).

IHaveNoMoney.com

Personally i would close the accounts down, me and hubby discussed this the other day we have 7 cards between us and in the passed we clear them then say we will never spend on them again but always end up using them, the plan we have is to keep one card probably husbands barclay card and to give this to my mum to look after then when we go on holiday it will be there for emergencys i.e medical emergencys not days out lol

Mrs_Jojo

If you pay the minimum on the 0% card and the rest on the Barclaycard one to clear it and then throw money at the Nat West you could probably pay even less interest!

I would close all except one when they are all clear (read I will close all except one....!) and keep one for emergencies, whether the most convenient (for checking balances online etc), the lowest APR (obvious) or the most beneficial - I will be keeping my Clubcard one as I love the points!

edinburgher

Pay them all off and keep the most competitive credit card - if an emergency arises it's not as if store credit at Very or Argos will be much use!

Also, bar a short term emergency (broken washing machine or the like), having access to credit isn't necessarily a good thing as a lost job (for example) would greatly reduce your ability to actually pay off the credit used.