Should we cancel credit cards?

BlueBlond

My husband and I are downsizing, moving to a smaller property and using some of our equity to pay off all our credit cards.

Should we cancel our credit cards or keep the accounts open but cut them up? We have seven credit cards between us, I'd like to keep one each but would like the cancel the rest to make things simpler, reduce paperwork and reduce temptation (even if you cut them up, they'll send new ones when they're out of date).

However, I know this would impact our credit rating. Would our credit rating recover in time as store cards (which are mine and rarely used and always paid off monthly when I do use them) and the two remaining credit cards start to increase our credit limits?

Many thanks.

jpb77

I wouldn't cancel ALL cards. Have at least 1 open for each of you. Keep the credit card open that has the best APR etc. Then at least you still have access to credit if the need arises. Don't cut everything off :-)

This will not affect your credit rating as 'settled' accounts appear as a positive trait. But don't close all accounts as this can have a negative impact by not having any available credit. Especially in the future if you wish to apply for a credit card that has an attractive deal.

BlueBlond

I'm so sorry, I didn't realise I hadn't replied to this. Too much drama! Our house sale fell through because the buyers couldn't raise the finance, we accepted the other offer we'd had but then that fell through after the buyer changed her mind. Tough times in the housing market.

Anyway, it was really helpful to know that accounts that appear as "settled" are a positive trait on your record. When we do sell the house we will keep one card each and cancel the rest.

Thank you, jpb77.

debtcutter

Good luck with the cards and hope the house sale goes well!

My friend's in almost the same situation selling his house, hope it goes through soon!

BlueBlond

Thank you, debtcutter.