Credit Cards - is it best to close old cards for future applications

the_philo

Hi all,

I've just signed up to the forums so hello all.

Just a quick questions really - I have a couple of credit cards and a decent credit history. However am i best closing cards without a balance so that in future when I go and try and get other credit for say a balance transfer card it looks like I don't have a lot of available credit to my name that I can go and max out or does just have one card with 75% of available credit or does that look like you can't manage finances\using up most of my available credit.

Cheers
The_Philo

zerog

Depends on your income, your total available credit and your used credit. Closing cards without a balance increases the proportion of your used credit. But having too high limit may be seen as risky.

The_Boss

zerog wrote: »

Depends on your income, your total available credit and your used credit. Closing cards without a balance increases the proportion of your used credit. But having too high limit may be seen as risky.

I had the problem Zerog describes regarding closing credit cards/reducing credit limits and posted a big thread about it about 7 years ago and it took almost 2 years to correct.. Suggest you do not close too many cards or reduce credit limits by too much.

What are your current credit limits and balanced used plus details of any loans?

izools

In my experience owing under 60% of my available credit has been more important than having limits that add up to under 50% of my annual income.

the_philo

The_Boss wrote: »

I had the problem Zerog describes regarding closing credit cards/reducing credit limits and posted a big thread about it about 7 years ago and it took almost 2 years to correct.. Suggest you do not close too many cards or reduce credit limits by too much.

What are your current credit limits and balanced used plus details of any loans?

Thanks for the replies

At the moment I've got 2 cards one with Halifax which has a limit of £7000 but no debt on it and a Barclaycard which has a limit of £9000 and I've got about £3000 debt which I hope to have paid off in 6 months from now.

I may need to use a card to make a purchase so will probably aim to apply for a new card in the summer with 0% for as long as a can for purchases which is why I am wondering whether I'm best closing the Halifax one now before applying for another but dont want to shoot myself in the foot. I've got a good credit history never defaulted and have a mortgage which i've never missed a payment and my wages have gone up 25% in the last 3 months and debts decreased.

Just to edit this I've also got a loan but this with my cards only adds up to about 25% of my salary.

The_Boss

the_philo wrote: »

Thanks for the replies

At the moment I've got 2 cards one with Halifax which has a limit of £7000 but no debt on it and a Barclaycard which has a limit of £9000 and I've got about £3000 debt which I hope to have paid off in 6 months from now.

I may need to use a card to make a purchase so will probably aim to apply for a new card in the summer with 0% for as long as a can for purchases which is why I am wondering whether I'm best closing the Halifax one now before applying for another but dont want to shoot myself in the foot. I've got a good credit history never defaulted and have a mortgage which i've never missed a payment and my wages have gone up 25% in the last 3 months and debts decreased.

Just to edit this I've also got a loan but this with my cards only adds up to about 25% of my salary.

Applying for another card or two should be fine then. Keep hold of your current two for a while so that you have 4-5 active credit accounts (assume you may also have a mobile contract) - that then shows lots of data indicating you are a reliable borrower and a good risk assuming all monthly payments are on time and credit limits not exceeded.

the_philo

Thanks for the feedback.

Yes I have a phone contract, mortgage, loan and 2 credit cards so I'm in that region. I checked Experian and I've got a rating of 999 but not sure how relevant that is but it shows nothing untoward on there.

I have moved house in December though and my names not on electoral roll yet so I am just rectifying that I assumed the council tax updated that but apparently not unless it kicks in with the new council tax year in April so I believe that can cause a few issues.

Experian_company_representative

Hello

Probably more important to credit scoring is your utilisation rate, as opposed to simply how much credit you have available. There's more information on this is this Q&A. Hope it helps.

James Jones