Closing a credit card account - Need some advice please.

sonique1

Yesterday I phoned one of my credit card company to say I would like to close my account. I have zero balance on this account and I am trying to reduce my available credit limit in the hope that this will improve my credit report score.

After few minutes of conversation this nice lady from the card company offered to credit my account with £50 for nothing. Basically she said as a gesture of goodwill I can use this £50 on any purchase and if i still decide to close the account I can do so. So I agreed & this morning that £50 is in my account.

I just need some advice please? Should I use it and then cancel the account OR I should cancel it without using the free £50. If I decide to use it will there be any kind of issues resulting from it?

Thanks in advance.

[Deleted User]

I'd spend the £50 and then still close if that's what you want to do.

Barclaycard seem to do this a lot these days, at least to selected customers.

CLAPTON

without knowing your circumstances it's impossible to say but it's unlikely that closing the CC will improve your credit rating
what's wrong with your credit record?

but anyway you may as well use the £50; free money with no adverse side effects.

sonique1

Thanks for the replies.

I have another 4 credit cards with current approx balance of £3000. Only 2 of the cards have balance remaining out of 5. one with about £1000 & other with £2000. Other 3 cards have zero balance & one of them is the above mentioned card.

On my experian credit report I have 2 negative factors. they are

1. The usage of your available credit indicates a higher risk.
2. You have no successfully settled non-mail order accounts.

On one of the forums I remember reading if you have too much credit available to you then this may affect your credit report. Am I right?


I am in the process of buying a new flat. So thinking about mortgage application.

Thanks.

[Deleted User]

What are the limits on the cards?

StuC75

sonique1 wrote: »

Thanks for the replies.

I have another 4 credit cards with current approx balance of £3000. Only 2 of the cards have balance remaining out of 5. one with about £1000 & other with £2000. Other 3 cards have zero balance & one of them is the above mentioned card.

On my experian credit report I have 2 negative factors. they are

1. The usage of your available credit indicates a higher risk.
2. You have no successfully settled non-mail order accounts.

On one of the forums I remember reading if you have too much credit available to you then this may affect your credit report. Am I right?


I am in the process of buying a new flat. So thinking about mortgage application.

Thanks.

If you close the accounts then your available credit will be lower and your other accounts in use will account for a higher percentage usage of that lower amount..

So its the Balances that are affecting you; not the available credit...

mortgage applications will be more concerned with how meeting those payments affect affordability of the mortgage..

TheGenerus1

StuC75 wrote: »

If you close the accounts then your available credit will be lower and your other accounts in use will account for a higher percentage usage of that lower amount..

So its the Balances that are affecting you; not the available credit...

Does mail order accounts count towards your available credit, like credit card accounts do?

sonique1

Deleted_User wrote: »

What are the limits on the cards?

Here are my limits.

Card1 limit = 2500 balance = 2000
Card2 limit = 2500 balance = 1000
Card3 limit = 1100 balance = Nil ( trying to close)
Card4 limit = 900 balance = Nil
Card5 limit = 500 balance = Nil

Also in my credit report:

Next ( mail order) limit = 3600 balance = Nil
T Mobile.

Hope this helps.
Thank you.

sscott5581

TheGenerus1 wrote: »

Does mail order accounts count towards your available credit, like credit card accounts do?

yes mail order accounts count where the credit limit is shown, for example freemans do not show credit limit only outstanding balance.

fozmcfc

sonique1 wrote: »

Thanks for the replies.

I have another 4 credit cards with current approx balance of £3000. Only 2 of the cards have balance remaining out of 5. one with about £1000 & other with £2000. Other 3 cards have zero balance & one of them is the above mentioned card.

On my experian credit report I have 2 negative factors. they are

1. The usage of your available credit indicates a higher risk.
2. You have no successfully settled non-mail order accounts.

On one of the forums I remember reading if you have too much credit available to you then this may affect your credit report. Am I right?


I am in the process of buying a new flat. So thinking about mortgage application.

Thanks.

Unused cards generally serve no purpose, unless they have 0% balance transfers or purchase offers on them.

You would be better off asking the card providers with zero balance on them, if they have any 0% balance transfer offers available, if they do, transfer the balances, closed down at least one of the cards you transfer from and work to pay as much off at 0%.

Getting a first time mortgage will obviously depend on lots of things, including your age and what you annual income is and how long and steady is your job.

I too am looking at a first time mortgage in London and I'm 42.

When asking about the possibility of getting a mortgage, other debt including credit cards were asked about.

They advised to clear down the credit cards as much as possible, preferably to zero balances and to get rid of any I haven't used particularly those with high limits.

I've got rid of one card and when I finally think ok, I'm likely to want the mortgage within 6 months, I will get rid of another couple of cards.

steve1980

Credit rating means nothing. It's all about your history.