Is it better to have open zero balance accounts, or to close them??

furryface

Hi, first ever post on this site, so please bear with me! I have managed to pay off a few credit cards (yay!) and am steadily working towards paying off the balances on the remaining ones I still have. My fixed rate mortgage comes to the end of its term next summer, and I am trying to get my credit rating looking as good as possible. Is it better to keep the credit card accounts open with zero balances, or to close them down?

If they are open and zero then the amount I owe (on the others) as percentage of what I could borrow (on all of them) looks good, right? Or I do I just look bad for having sooo many credit cards?

McKneff

I'd be interested in hearing the answer to this one also.
Whatever they are if you have ccs with a zero balance be careful of the dormany fee some charge nowadays, I know for a fact
Amex charge £20 per year for non use.

lisyloo

If they are open and zero then the amount I owe (on the others) as percentage of what I could borrow (on all of them) looks good, right?

Yes, but you could also have too much available credit.

Personally I always go for closure if the line of credit is no longer needed.
This is because

1) Having the cards open stops you getting NEW customer deals (for a period of time).
2) They are a fraud/id theft risk whilst the account is open.
3) Chance of cards being stolen without you noticing if not in use.
4) Risk of dormancy fees
5) Possibility of oo much available credit.

You have to weigh this up against
1) potentially createing a higher % of your available credit is used
2) closing down lines of credit

Difficult to say as we don't know your exact circumstance i.e. what you % of credit used vs available credit will be after closure.
I tend to fabour closure but I have plenty of credit history so it does depends a bit on your situation.

YorkshireBoy

furryface wrote: »

My fixed rate mortgage comes to the end of its term next summer, and I am trying to get my credit rating looking as good as possible.

In my experience mortgage lenders are not concerned with how much credit card debt you could have, only what debt you have got.

Is it better to keep the credit card accounts open with zero balances, or to close them down?

For the mortgage purposes, it doesn't matter in my opinion.

If they are open and zero then the amount I owe (on the others) as percentage of what I could borrow (on all of them) looks good, right?

Yes, providing your income and other financial circumstances support such available credit.

However, whilst you may not experience difficulty with the mortgage application, you may find that credit card providers are reluctant to grant additional facilities when the time comes to BT your existing debt.

Or I do I just look bad for having sooo many credit cards?

Number of cards held will go into the credit scoring model for credit cards, overdraft facilities, and unsecured personal loans...but I suspect not for mortgage applications.

All in my opinion of course.

McKneff

Thanks forthe input guys, I dont use my Amex or my Nationwide one so so they will get blown out this week.

I have a Coop one which gives me cash back and coop points for dividend so I think I'll just stick with that one.
More for convenience, I usually pay off in full each month and have no debt. Thanks again

Mr_K

You might get lucky with Amex. Sometimes they offer a retention amount not to close your account - £50 in my case. I took it, spent it, then closed the account This was also after I had also got over £100 cashback out of them and never paid a penny interest, suckers...

Roger1

McKneff wrote: »

Whatever they are if you have ccs with a zero balance be careful of the dormany fee some charge nowadays, I know for a fact Amex charge £20 per year for non use.

Well, that depends on the card. Mine don't.