Should I close my no longer needed CC?

michu

Hi,
I've moved to UK 18 months ago and I'm trying to build my credit rating. I had to take some debt on subprime credit cards to get some essentials - basic furniture, some clothing I needed for work, etc.

Right now I don't have any CC debt, all is paid in full. This is a breakdown:

The ones I've already paid and closed:
- Vanquis, £600 limit - paid in full, closed about 6 months ago
- Capital One, £200 limit - paid in full and closed today

The ones that are still available:
- Aqua, £800 limit - balance £0
- HSBC, £1000 limit - balance £0

I think I'll leave my HSBC card just in case I need it, and I wonder if closing my Aqua card will help my credit rating, or it will be better to keep it but not use it? Or maybe I should use it, but pay in full every month, as I'm going to do with the HSBC one?

Thanks for any advice

tonkinator

It's up to you really.

There's benefits to each, depending on the rest of your financial picture.

You say you have no CC debt, do you have ANY other debt? Loans, mortgage, overdraft?

If you have nothing else, you're probably better off (in terms of affect on credit file and future borrowing potential) keeping a credit card open, using it and clearing, to make sure you continue to have repayments registered, regularly. Also, keeping available credit there but not using it will decrease your balance:limit ratio, which will often be used by creditors to see if you're living within your means. Having low balance:limit shows you're probably not spending crazy amounts compared to your income.

If you already have plenty of credit it might not make that much difference, either way.

No matter what you decide, it's probably worth shopping round for the best card. If you're going to use it every month and pay back in full, have a look at the various rewards cards you can get, or cash back ones.

You might be able to save some money on shopping bills if you move with one of the supermarket reward cards (if you start using CC for food shopping, then pay off in full)