Paying off credit cards in full - should I cancel or keep them?

scorcher70

In the next few weeks I shall finally be selling a house that has been empty for over a year, and be able to pay back some of my credit cards in full - hooray.

Should I cancel the cards once I have paid them off?

I really don't want the temptation of using them again, so that was my intention.

I also have 4 current accounts, some of which have nothing in them now.

But I will be moving house in the next 12 months, and being self employed it's not as easy as before for me to get a new mortgage - my current one with Intelligent Finance cannot be ported

Would having more / less available finance on credit cards make any difference to a mortgage application, or does it not make any difference?

And does the same apply to bank accounts?

Help!

[Deleted User]

It would be advisable to keep at least one and use on a regular basis, paying off in full each month. Personally, I'd keep at least two.

scorcher70

So ditch the high rate ones, and keep a couple of the others, but lower their spending limits maybe?

[Deleted User]

Yep - that would be a good idea. You might also want to consider if any of them are likely to give good offers in the future that you may want - eg BTs. MBNA are more generous than most in this regard, for example.

Set up a full payment DD on each card you keep and just use them for regular purchases each month - petrol, food, etc.

It'll keep your credit rating up and make you look a safer bet when it comes to getting a mortgage.

scorcher70

That's great advice - cheers!

Any ideas on the bank accounts?

[Deleted User]

If you don't need the current accounts, then close them. They don't affect your credit rating either way, and it will eliminate the very small chance of any unwanted activity on them. Just make sure that there are no old DDS or anything on them first.

scorcher70

Brilliant - thanks so much - you are a star

mrsrolfie

Just be careful they don't have dormancy fees if you don't cancel them - some credit cards in the small print say that if you don't use it for 6motns/a year you'll be charged £12.

I would personally cancel them all, if desperate you can always open a new one at a 0% rate or that has another introductory offer. But that might not always be possible if you struggle as you say with being self employed. Just something to look out for anyway.

scorcher70

Many thanks - I'll check the Ts & Cs